Advice on clearing Overdraft please!

w4nderer

Morning everyone,

I currently have an OD of -£1250 - which is constantly maxed out give or take a few quid each month. I'm charged £30 a month for being this far overdrawn and i just cannot get rid of it.

I've been reading up about doing BTs/SBTs etc on the MSE site and forums and i would like the advice off someone here about whether its worth it or not.

I'm a new FTB of a home recently, and after bills etc ive got around £120 a month spare for myself. This £120 is what i try to use to pay off my overdraft, but after the £30 overdraft fee i pay leaves me £90 a month equalling £22.50 a week to live off for personal spends and pay off the OD (i find this tough).

I hope this has made sense so far.

If this is an ok option, i was also looking at then switching bank accounts to one that you gain cash back with for joining, which can then be put aside towards the credit card bill.

Any advice would be very greatly appreciated, and thankyou in advance.

w4nderer.

YorkshireBoy

w4nderer wrote: »

I've been reading up about doing BTs/SBTs etc on the MSE site and forums and i would like the advice off someone here about whether its worth it or not.

So you'll have seen that Virgin Money will give you 19 months 0% on money transfers for a 4% fee.

4% of £1,250 is £50.

£30 per month in O/D charges over the same period is £570.

So your question is "is it worth paying £50 to save £570, ie get a 11-fold return on my investment?"

Does that help you make your decision?

You'll need to find £25 per month for the minimum payment. Suggest you pay at least £30 per month (much more if you can) as you have been doing with the overdraft.

i was also looking at then switching bank accounts to one that you gain cash back with for joining, which can then be put aside towards the credit card bill.

If you're wanting an overdraft match with the new current account, you'd be better to wait until you have 2-3 months statements showing you haven't used the overdraft.

Take a look at the budgeting and current accounts board for more details of what's available.

w4nderer

Thankyou YB,

Thats has helped, i've looked around and yes the Virgin card seems to be one of the best. There is a halifax 'balance transfer credit card' offering 0% for 22 months too, which i'm about to enquire about.

If i switch accounts to gain cash back as mentioned above, i do not want an overdraft. As once cleared, my aim is to never dip into the chargeable overdraft facility again.

YorkshireBoy

w4nderer wrote: »

There is a halifax 'balance transfer credit card' offering 0% for 22 months too, which i'm about to enquire about.

Why? That card won't pay cash into your current account at 0%.

If i switch accounts to gain cash back as mentioned above, i do not want an overdraft. As once cleared, my aim is to never dip into the chargeable overdraft facility again.

But emergencies will always arise. Arranged facilities are always cheaper than unarranged facilities.

Unless it's just a willpower/discipline issue?

w4nderer

YorkshireBoy wrote: »

Why? That card won't pay cash into your current account at 0%.But emergencies will always arise. Arranged facilities are always cheaper than unarranged facilities.

Unless it's just a willpower/discipline issue?

The halifax card has a transfer fee of 3.5%

Sorry i didn't make it clear in my previous post, i meant to say i wouldnt go over the free O/D limit. I've been in an O/D for so long now, it's time i got out of it for good.

YorkshireBoy

w4nderer wrote: »

The halifax card has a transfer fee of 3.5%

The fee is irrelevant. The card doesn't meet your requirements.

w4nderer

This might sound like a really stupid question to you, but i'm new to credit cards etc and have never used them in the past so i don't 100% understand all the lingo that goes with them. How does it not meet my requirements?

Reesy1981

Its a balance transfer card, not a money transfer, which is what you need to settle your OD

YorkshireBoy

w4nderer wrote: »

This might sound like a really stupid question to you, but i'm new to credit cards etc and have never used them in the past so i don't 100% understand all the lingo that goes with them. How does it not meet my requirements?

Because, as I said in post #4, "That card won't pay cash into your current account at 0%."

When you said "I've been reading up about doing BTs/SBTs etc on the MSE site" I assumed you'd read this article...

http://www.moneysavingexpert.com/loans/cut-loan-overdraft-costs

w4nderer

Thanks,Reesy1981.

When you said "I've been reading up about doing BTs/SBTs etc on the MSE site" I assumed you'd read this article...

yeah i read that YB, i'm just proving that i'm new to the Credit card scene, and learning whats what at the mo. Thanks again. I'm going to go for the Virgin card and call them up now.

YorkshireBoy

w4nderer wrote: »

I'm going to go for the Virgin card and call them up now.

Before you do...

You said you'd moved home recently? Are you on the Electoral Roll there yet?...bearing in mind the register is not updated between 1st August and 1st December each year.

Might be best to verify this with Experian before possibly wasting an application search.