Overdraft Plan

klfairy

I have a Halifax overdraft which means a £1 per day it's used for amounts between £300 and £2500. My overdraft usually is up to its limit by the end of the month (£2000) and I generally end up paying £1 per day every day. Once I start paying it off, it'll probably be a while before I'm overdrawn less of the month than I'm in credit.

I can't work out to how to snowball this debt because it's not an APR. I can't work out if it's "better" or worse than our other debts, and therefore can't prioritise them properly.

Does it sound like a sensible idea, when this debt is the top priority, to save some money in a savings account where it will earn me (paltry) interest, and then transfer a lump sum, say £1000? Or is it better to just chip away at it and phone them every month to reduce it by another few quid?

Tixy

You can't work out a real APR but the way I would do it is if you say its costing you £30 and the maximum balance is £2000 then thats likely to be cheaper than some of your other debts.
Even if the balance remains at £2000 at the end of every month for the next year (whilst you pay off other debts), it will only cost £360 which is sort of equivalent to an APR of 18%.

Any debts that are more than 18% focus on paying those first. Not worth putting any money into savings until your other debts are clear first.