Overdrafts/credit cards etc - advice please!

bruceiow

Hi all,

Can I put a senario to everyone and ask for peoples views on the best way forward..

We have one credit card, with just shy of 1k balance, currently the lion share of the monthly payment is going on interest.. it has been that way for years.
:mad:
There are two overdrafts one with lloyds one with NW, both are cash cows for the banks.. in total roughly 1.2k

I am looking for a way to bring that card and the two overdrafts together in to one consolidated place with 0% for as long as possible. I cant see a way of paying OD off against the current card that we have and then taking the whole lot as a balance transfer to another card.

Can anyone offer some advice please as i HATE paying the banks more than needed!!

Manh thanks

bruceiow

Have i stumped the world finest advice givers?+?

CLAPTON

first and most urgent thing to do if this has been going on for years is to draw up a proper budget and to start to live within your income

try as a start
http://www.stoozing.com/msoc/soacalc.php


secondly post up the results either here or on the debt free wannabe board and see what people can suggest about you finances


thirdly tell us the details of the debts; amount, APRs/fee and how much you are repaying each month

fourth tell us what your credit files say


then we may be able to help a little

TadleyBaggie

As Clapton says, more details needed. If you are spending all your income every month, and not making any dent into your debt, then it's unlikely you are going to get a 0% card.

bruceiow

Hi Sorry, yes I need to clarify here a bit lol.

Ok the credit card was used once and once only - that was for tuition fees about 7 years ago. The card still physically exists, but no purchases have been made since that one transactions.

Both overdrafts have been static for ages at the amount they are at (with the exception of monthly interest and token payments to them as and when they are remembered). When they are cleared down elsewhere, those two accounts will be closed.

We want to get everything moved to one place, and set up a DD to get these things paid steadily. It is easy to have these things and forget / pay the minimum.

We have 2 young children & I see every penny I waste on interest as money I am cheating from my kids. I need to get wise to the best deals out there and take some action.

david39

Whatever you do, you need to get the overdrafts cleared as your main priority.

The bank(s) can withdraw them without notice at any time - this may not be because of anything you do, but because of a tightening of purse strings or change of policy within the bank itself. The T&C's of the overdraft may suggest that they will try to give you 30 days' notice of withdrawal, but they will always leave themselves the option of immediate withdrawal as well.

If they do withdraw the facility immediately, they will do it on the day your salary gets paid into your account - the account balance will be used to pay off the overdraft, leaving you with a much reduced sum of money for yourself.

There are many tales of woe on this site from people who have experienced this problem. Overdrafts are intended as a short term answer, not as a permanent solution, to a problem. And, if the bank removes the overdraft facility, it will make your chances of a 0% balance transfer even more unlikely.

BugsyBrowne

The chances of banks withdrawing your overdraft are still very slim as read a review in the mail the other week with statistics showing well over half of banks customers are generally in their OD.

bruceiow

Is it possible therefore to pay the overdraft using the credit card that we still have (albeit a bit dusty and old fashioned looking!!) .

Then I can hopefully get that moved on to another deal. We have a household income of 50k, no bad debts, no missed payments. We should have good credit history (this CC has been minimum paid for 7 years, we have a mortgage and I had a car loan 5 years back that I cleared ok. Both my wife and I also have recently renegotiated mobile contracts successfully).

YorkshireBoy

An MBNA card will take both your overdraft and credit card balances. Check out their website, where you'll find their money transfer feature offers 20 months 0% for a 4% fee.

Be careful not to just pay the 1% monthly minimum payment, otherwise you'll make very little impact over the duration...obviously!

bruceiow

Thank you for that - I will go and have a look at their offers.

One question I have is in regard to the 4% transfer fee. Is that fee seen as a purchase & therefore interest accrues against it?

Many thanks

YorkshireBoy

bruceiow wrote: »

One question I have is in regard to the 4% transfer fee. Is that fee seen as a purchase & therefore interest accrues against it?

You've probably found your answer by now, but just in case you haven't it's not interest bearing. It'll be lumped in with the £2.2K at 0%.

But what if it was interest bearing?...it's not going to be a deal breaker is it? I mean, 3% APR (broadly the annual equivalent) on £88 (£2.64) is infinitely better than circa 19% APR on £2,200 (£418) isn't it?