Credit card Versus Overdraft

virgo149

I've approx 350 pounds left on a BOS credit card whose 0% finishes on 4th April. With such a small amount, I'm not prepared to switch again as it should be paid off within the next 3/4 months. My question is would it be better to use my 500 pound 'free' overdraft to pay it off before the 4th in order to not pay any interest on the amount left. I'm probably being very thick here but am slightly confused with best route.

DavidHM

Free overdraft = no fees or no interest?

If no fees then it depends on the rate of interest.

If no interest then yes, absolutely it would be better.

cannonball_2

If its totally free overdraft...then answer is yes I would do it, might save you about £15 or more depending on interest rate of CC after your 0% has finished and also length of time you pay it off.

virgo149

Thanks! Yes HSBC have been 'good' enough to give me a completely free overdraft. I thought it would be better but have a bit of a thing about being overdrawn - have not been overdrawn more than 5 pounds for over 10 years now. Like I say, just being a bit thick over this!

Interest rate is around 16.9% when 0% finishes. No brainer really I suppose when i think about it.

cannonball_2

I dont think youre being thick virgo, I have the same thing about overdrafts! Ive racked up thousands on credit cards but dont like going more than a pound overdrawn....even though my overdraft fees are/were less! I think its to do with real money...a good lesson for me never to have anymore credit cards!!:D

virgo149

cannonball wrote:

I dont think youre being thick virgo, I have the same thing about overdrafts! Ive racked up thousands on credit cards but dont like going more than a pound overdrawn....even though my overdraft fees are/were less! I think its to do with real money...a good lesson for me never to have anymore credit cards!!:D

This 10 years of overdraft free were hard fought for back then so I guess that's where this comes from. Plus until my job changes next month I'm weekly paid so it will look even worse for a while. But I think I will bite the bullet and do it. Even a few pounds saved is better than none.