Silly mistake?

Tomo8281

Hi,

I have a student account with Halifax, and its been great. Over the years of a student I've had to dig into the big overdraft I was given (£2750) to survive and pay rent, and now that I am out of uni and with a good paying job (above the 20k+) I want to get rid of this student overdraft asap due to the fact I don't want halifax realising its still 0% interest.
I thought I could kill 2 birds with 1 stone in this situation. As quite a young person my credit history is kinda 0 apart from student loans. So I thought getting a Halifax credit card and doing a balance transfer to my student account to get out of the overdraft was a better idea then waiting ages to get out of it naturally. I've received my pin code today so should be getting my card next week, but I just found out that you cannot do balance transfers between Halifax accounts (doh).

I'm wondering if anyone has an idea to get around this? Maybe apply for a card at another bank to pay off my overdraft, then instantly pay off that one with my Halifax card to close it, then monthly pay off (interest free for 11 months) my Halifax one from a current account.

Or should I just cancel my credit card?

Any ideas?
Thanks a lot,
Tom

YorkshireBoy

Tomo8281 wrote: »

As quite a young person my credit history is kinda 0 apart from student loans.

I'm fairly certain your student loan does not appear on your credit file?

but I just found out that you cannot do balance transfers between Halifax accounts (doh).

Next time research first! Very few cards will transfer cash at 0% to a current account (the so-called super balance transfer). You need to look at Virgin or one of the other MBNA co-branded cards.

I'm wondering if anyone has an idea to get around this?

If the card has 0% for 11 months then you could spend your way out of your overdraft, ie put your spending on there. Obviously you'll need a plan for paying off the card...maybe you can afford it now with a "good paying job"? If not you'll need to shift any remaining debt by way of a balance transfer to another card towards the end of this year.

mrcow

There is no point doing two transfers. You'll pay two fees.

Does the Halifax card actuaklly transfer to bank accounts, just not your own?

If so, is there anyone you trust e.g. parents who have a none Halifax account that would oblidge with helping with the transfer?

Gromitt

Student who has just recently landed his first job.

Got a bank account which is always in the overdraft.

Applied for and got a credit card.

I wouldn't fancy your chances getting a 0% card elsewhere.

Keep your card, spend on it, pay it off every month. Once you've had it 6 - 12 months, then apply for something else. More chance of being accepted then.

Since your overdraft is 0% anyway, just keep going at it and hope Halifax don't notice. If they do, you could always ask them for a small loan to pay it off (or perhaps add it to your student loan saying you want to consolidate your student debts)

YorkshireBoy

Gromitt wrote: »

Keep your card, spend on it, pay it off every month. Once you've had it 6 - 12 months, then apply for something else.

It seems possible that the OP's Halifax card has 0% for 11 months on purchases*?...unless it's some kind of BT card only. Maybe they could clarify?


* EDIT: The only card on their website offering 11 months 0% is the All In One card...and that's on purchases as well as BTs.

Tomo8281

YorkshireBoy wrote: »

I'm fairly certain your student loan does not appear on your credit file?
Next time research first!

It doesn't. Also I didn't think I needed to research anymore, I read all the MSE articles on CCs and did reading, I guess I just overlooked it. I'm quite new to all this CC stuff so I guess we just learn!

YorkshireBoy wrote: »

maybe you can afford it now with a "good paying job"?

I meant that in the way I won't miss repayments and that I am eligible for cards/accounts that require you to put it a certain amount per month... not in an egotistic way...

Gromitt wrote: »

Keep your card, spend on it, pay it off every month. Once you've had it 6 - 12 months, then apply for something else. More chance of being accepted then.

Since your overdraft is 0% anyway, just keep going at it and hope Halifax don't notice. If they do, you could always ask them for a small loan to pay it off (or perhaps add it to your student loan saying you want to consolidate your student debts)

I think the using my card as my main spending account is quite a good idea, don't know why I didn't think about it. Will have to switch around some directdebits and standing orders though but that shouldnt be too much of a hassle.

Thanks for the help guys, appreciate it!

YorkshireBoy

Tomo8281 wrote: »

I think the using my card as my main spending account is quite a good idea, don't know why I didn't think about it. Will have to switch around some directdebits and standing orders though but that shouldnt be too much of a hassle.

You can't put direct debits and standing orders on a credit card if that's what you meant? If not, what do you mean by the above?

Tomo8281

YorkshireBoy wrote: »

You can't put direct debits and standing orders on a credit card if that's what you meant? If not, what do you mean by the above?

Thats what I meant.. hmm. Since a lot of my paycheck is eaten away by standing orders (rent etc). I guess I could manually do them for a couple of months. I have a Career development loan that I got for my MSc through Coop. I'm currently paying that back 200 a month. Is it possible to use the halifax CC to pay off that monthly debt? Basically can I use my CC to balance transfer 200 a month to my CO OP bank account?

YorkshireBoy

Tomo8281 wrote: »

I have a Career development loan that I got for my MSc through Coop. I'm currently paying that back 200 a month. Is it possible to use the halifax CC to pay off that monthly debt?

You'd need to ask Co-op, but generally you can't pay credit with credit (other than balance transferring from credit card to credit card).

Basically can I use my CC to balance transfer 200 a month to my CO OP bank account?

No, because as I said earlier the Halifax card won't pay into any current account*.

By spending your way out of the overdraft I meant paying for everything you'd normally use a debit card for with your credit card...thereby reducing the size of your overdraft. Obviously it works best if you've a £250 a month petrol cost and £100 a week grocery bill. So in your case it may not work.


* Sometimes they do offer this facility, but not generally whilst you have an introductory offer running (which you have). And because you've got the shortest duration at 11 months (others will get 13 or 15 months), plus a big overdraft already, I wouldn't think they'd make you this offer anyway.

Tomo8281

YorkshireBoy wrote: »

You'd need to ask Co-op, but generally you can't pay credit with credit (other than balance transferring from credit card to credit card).No, because as I said earlier the Halifax card won't pay into any current account*.

By spending your way out of the overdraft I meant paying for everything you'd normally use a debit card for with your credit card...thereby reducing the size of your overdraft. Obviously it works best if you've a £250 a month petrol cost and £100 a week grocery bill. So in your case it may not work.


* Sometimes they do offer this facility, but not generally whilst you have an introductory offer running (which you have). And because you've got the shortest duration at 11 months (others will get 13 or 15 months), plus a big overdraft already, I wouldn't think they'd make you this offer anyway.

Can you pay bills with a CC? I.e. Rent (transfer to another persons bank account).

opinions4u

Student overdrafts on Haifax accounts remain interest free for 12 months after the expiry of the course.

So, ideally, you want to open a savings account and pile the money for overdraft clearance in to that. Earn a bit of interest on it and then when they do give you 2 months notice that they're going to start charging you for the overdraft you will have more than enough time to pay the amount saved off the overdraft. Halifax Online Saver might be the right starting point for this (but you might get slightly more interest at places like ING).

Once it drops off student terms Halifax overdrafts tend to be expensive. £2 a day for £2,500+; £1 a day below this.

So:

1) Spend on the 0% credit card - everything you can. Food, fuel, travel, leisure etc.
2) Open a savings account.
3) Pay the amount spent in to the savings account.
4) Pay the minimum payment on the credit card plus £1 - it looks better on your credit file this way.
5) Clear the overdraft only when you're told it will no longer be interest / charge free.

Oh, and make sure your finances are working out how you're going to clear the credit card debt asap when that gets towards the end of its 0% deal.