Clearing overdraft

Pipsy7

Hi all
After a little bit of advice

I'm trying to claw myself out of my university overdraft which is £1600. I'm with Lloyds and I have till August.
I currently get paid £1000 after tax
My rent is £400
and telephone bill & gym membership is about £100ish.

I just can't ever see myself clearing it.
So I was wandering, is it worth getting a interest free credit card to pay my rent for the next 3 months.. clear my overdraft. And than settle the credit card as such? Would this work?

Just wandered what everyone's thoughts are.

Thank you

Tixy

Have you worked out how much you should have left after everything to pay off this debt each month (either by reducing how far you go into the overdraft or to pay off the card if you take that route). How much is this?

Does whoever you pay rent to accept payment by credit card (and without a surcharge?)

If you could get a 0% promo credit card then yes this might be a worthwhile route to take if you are struggling with the discipline of reducing your maximum overdraft balance each month.

Is your Uni overdraft 0% at the moment? If so then you could always set up a new bank account for ongoing current account and then set up a standing order to old overdraft to pay off the amount you've worked out you can afford each month (assuming you can afford to repay enough to get it clear by August, i.e about £320 a month).

As an aside that looks pretty expensive for a phone bill & gym cost. Is it a mobile phone? are you in contract? have you asked if they will drop you down a tariff, or if not in contract have you shopped around for a cheaper deal?

kwmlondon

Hi. It really depends on your discipline here. If you are very organised and restrained then you could use a spending credit card with 0% to pay for your gym membership & phone bill and other expenditure. You probably could not use it for the rent as I doubt you would be able to pay with that method and you won't be able to take cash out of an ATM and still get 0%. However, if you really are organised and can be responsible then something like the Virgin credit card could work for you. They will transfer money direct into a bank account so you could potentially pay off your overdraft and have it as 0%. However, you must not treat any of this as "your money." It's the bank's, it's a loan you need to repay and you absolutely MUST retain control of it.

Good luck.

Pipsy7

I think I would have about £350 each month to clear it.
So it would take me 5 months?

I just find it all very confusing.
I'm so angry at myself.. At uni it was only £800. But I have had to increase it to relocate for a job.

I'm just starting to really worry about it

Tixy

If its interest free and tha maximum balance during the month is £1600 then yes it would take 5months at £350 a month.

A lot of people do find it hard to get out of an overdraft as they are used to spending up to their limit, or for some up to the point their card is refused. Many of us get into the habit of thinking I've £300 left until payday, when in reality they mean they are already negative £700 and have £300 until they max the overdraft.
If you can be disciplined with what you spend each month and ensure your max balance is £350 less than last month you should be able to clear it, but a lot of people find it easier to open a new bank account with no overdraft and then pay it off by standing order the same as they would for other debts.