Debt free question.

Bennbfc

I have a arranged overdraft of £1500 which I would like to get rid of.

Which would be the best way?

A. Get a credit card (0%) if possible, pay it all off then pay the credit card back monthly. Also helps with Credit score.

B. Go and see the bank and have a word to see if they can take a payment every month to reduce the amount I have borrowed.

C. Another suggestion, suggested by you lot.

The problem is that the £1500 is more than my monthly pay, for now. I'm on just over a £1000 take home a month, but this is only a training rate. This had all come about because my GF and I were looking at mortgages, just the initial costs, monthly payments etc. So would a Planned Overdraft contribute to a bad credit rating?

Thanks so much for the advice.

Benn.

Growurown

Bennbfc wrote: »

A. Get a credit card (0%) if possible, pay it all off then pay the credit card back monthly. Also helps with Credit score.

B. Go and see the bank and have a word to see if they can take a payment every month to reduce the amount I have borrowed.

C. Another suggestion, suggested by you lot.

A. Only if you can be completely sure that you won't run up more debt. The likelihood is that you will run up the card and the overdraft.

B. You could ask the bank to convert the overdraft to a loan, cancel the overdraft facility so you can't build it up again and pay back monthly. This will incur interest but it may be a better rate than paying the fees for the overdraft.

C. Get really strict with yourself and don't spend all your salary and pay the overdraft back that way.

ellesbellesxxx

Option c from Growurown.. a will be more costly, impacting on credit rating

bargainbetty

On payday, call the bank and reduce your overdraft by £100. Reduce your spending accordingly.

Repeat as necessary

Growurown

ellesbellesxxx wrote: »

Option c from Growurown.. a will be more costly, impacting on credit rating

Sorry don't agree. OP said the overdraft was arranged so as long as the agreed amount isn't exceeded it won't affect credit rating.

ellesbellesxxx

Growurown wrote: »

Sorry don't agree. OP said the overdraft was arranged so as long as the agreed amount isn't exceeded it won't affect credit rating.

Sorry I meant that paying off money,an overdraft, with a credit card is costly - my understanding was that there were costs involved as it's not goods it's money Might be wrong but that's just my current understanding

ellesbellesxxx

Hence voting for option c not option a

Growurown

ellesbellesxxx wrote: »

Hence voting for option c not option a

Ah right now I'm with you. Yes the OP would have to look at charges etc. to see what is the cheapest option, so 'A' might work however in my experience opening another form of credit just leads to more debt. So I agree option 'C' is the better choice.

tinkerbel

why not get a savings account and pay something into it until you have £1500, then pay it back in one lump sum and go from there?

asparagus1968

i did this by opening new current account with a different bank,
changing over salary and any DD's and SO's to new account,leaving just the OD on the old account.
then i set up a DD from new to old for £50 (whatever you can commit to)until i had paid it off.
also,if you get a 0% card,there is usually a 3% ish fee to pay up front,that'd be put to better use actually paying off the debt?
good luck