Credit Card vs Overdraft - which is cheaper?

GingerFurball_2

Have a bit of a dilemma over whether or not I should clear off my credit card.

My credit card balance is currently sitting at £383 and something pence. My statement is due this week and I'll probably have about £25 interest added to the balance (balance was sitting at over £1000 for most of the month) About £80 of this balance is cash advances (I know) which attract 29.95% APR, the rest is purchases which I think are at 25.41%.

My current account balance is sitting at £150, and I've got £100 of space in my student overdraft, so paying off the remainder of the balance in full would leave me roughly £130 overdrawn on my current account.

Sounds good, right? Few problems though:

My current account is with the Bank of Scotland, who will charge me £1 every day I'm overdrawn.

I'm a student and work part-time earning roughly £400 a month and the last loan payment of the year went into my account last week. With my exams coming up, I won't have the opportunity to work some extra shifts until June, so it won't be until mid-July that my bank balance will see any benefit!

Blasting into my overdraft now to clear my credit card would mean that it's very likely that I'd be stuck in it for a couple of months, costing me £60 in fees in the process.

So my question is, am I correct in thinking that it's actually cheaper for me to chip away at this balance over the next couple of months to clear it off rather than paying it all off tomorrow and being more or less stuck in my overdraft for 2 months?

YorkshireBoy

GingerFurball wrote: »

...snip...

Very long question (nice to get the full picture in the OP though for a change). Short answer, yes, leave the debt on the card.

property.advert

Get a better student bank account. In fact, get lots of accounts.

emma+_6

it seems a rubbish student account, most give you £1000 overdraft (or at least they did in my day)

I'd say keep it on your card but pay the extra £150 you have in your current account, or at least £120 of it

GingerFurball_2

My student bank account has a £2,000 interest free overdraft. The £100 mentioned in the OP is how far away from my limit I am on the account.

Long story short, was with the Bank of Scotland for my student banking, they wrote to me to tell me that they'd be removing the interest free status in June. Wrote back to them complaining because I'm still a student and won't graduate until June 2012, they wrote back and said my account would revert to a current account in 14 days. So switched my student banking to the Co-op, and have maxed out my overdraft in order to pay off my BoS overdraft and a large chunk of my credit card. I've kept the BoS current account because I cannot be bothered switching my direct debits.

I'll be continuously chipping away to get the card paid off (was £3500 in July, most of which was cash advances and interest that had compounded due to the order stuff used to come off).

£150 will be coming off it on Thursday. Should hopefully have it cleared off in a month.