Should I pay off overdraft of credit card first?

pilky

Hi guys, I may have a couple of thousand coming my way next month and I am going to pay it towards paying off my debts. I have a credit card and an overdraft (both around 16% interest each month) and I dont know which one to pay it towards and any advice would be appreciated.

I have tried to transfer my credit card to a 0% but I just cant get credit at the moment - I dont know why because I have a good credit score - I have spoken to experian and the only thing they said why they dont think I can get credit is because I am using over 70% of my limit. I explained that the reason why this is is because I have paid off 4 credits cards and closed the accounts down.....anyway I am digressing here.

Any ideas?

theoretica

Sometimes small overdrafts can be very expensive because of the monthly fees. (£10 a month fee becomes a high percentage if you reduce borrowing from £1000 to £100.) If you have one like this and are in a position to pay it off at one go it might make sense. So long as you won't slip back into your overdraft.

bottleofred

If they are both around the same rate of interest, I'd clear the one that is going to cost the most.