Paying off overdraft with CC

Tomsusername

Morning all, after neglecting my finances for far to long I have recently began to tackle them. I have an overdraft of £1000, currently £600 into that and I'm being charged a lot of money each month by Lloyds. I was thinking I would be better off paying off the overdraft with a credit card that has low or no interest for at least twelve months (or longer) on balance transfers etc. any recommendations? Not had a credit card before so may not even be lent the credit in the first place. Thanks in advance!:money:

mark55man

Not generally a good idea to consolidate like that, but if you are confident you can make the payments (now you are getting things under more control) it could be useful

I have just joined Lloyds and if you are on same account as me your overdraft will cost £6 per month that you ise it + interest which will be equivalent of £72 + interest of £50 over a year

a 0% balance transfer (if you can get it) will normally cost a one off 3% which on £600 will be £20

Alternative would be to switch bank account (which is easier now) maybe to a bank with a cashback joining fee and which will let you have an overdraft.

Alternative 2 would be a loan - which has a little more discipline behind it than a card which is easier to mismanage

Its really not tricky to switch any more with the new service - although for me the next pay day and start of month will tell whether it worked properly!!

Before you do any of the above be clear with yourself that you are just not going to end up in a worse position at the end of the year - if you do it be strict and strong with yourself

imoneyop

Tomsusername wrote: »

Morning all, after neglecting my finances for far to long I have recently began to tackle them. I have an overdraft of £1000, currently £600 into that and I'm being charged a lot of money each month by Lloyds. I was thinking I would be better off paying off the overdraft with a credit card that has low or no interest for at least twelve months (or longer) on balance transfers etc. any recommendations? Not had a credit card before so may not even be lent the credit in the first place. Thanks in advance!:money:

To transfer the overdraft to a card, you would need a super balance transfer card rather than just an ordinary card - have you had any credit (other than the o/d) before? If not then a transfer card is likely to be out of your reach.

Tomsusername

Than for the advice, I'm being stung for around £26 per month. Over a year that's £300+ so within a year of paying off my overdraft with a 0% card I will only need to find another £300 to clear the debt. In theory!:eek:

Tomsusername

Only credit I have had is the overdraft, and it's been abused.. and abused.. and abused..

imoneyop

mark88man wrote: »

Alternative 2 would be a loan - which has a little more discipline behind it than a card which is easier to mismanage

£600 is going to be below the minimum that the mainstream lenders offer, so you would be looking at the scummier end of the market, which is probably not a route the OP wants to be taking.

BugsyBrowne

£600 on a Lloyds planned overdraft are not exactly sky high are they TBH..

If you're struggling with £600 then getting another credit card is not the best move..

Tomsusername

So I just need to man up and pay it off as soon as possible? The faster I pay it off the less they will charge me per month I suppose.

imoneyop

Tomsusername wrote: »

So I just need to man up and pay it off as soon as possible? The faster I pay it off the less they will charge me per month I suppose.

It looks like on planned overdrafts, Lloyds charge £6 a month and then interest at 19.94% EAR, so yes the quicker you can clear it the less you will pay each month.

Take a look on the dfw board, they may be able to give you ideas on how to cut your monthly outgoings to gain a little more to throw at the overdraft each month. Also have a search through your stuff and see if there is anything you can eBay to earn some extra cash (perhaps see if there's any overtime going at work or look for a short term second job).

YorkshireBoy

Tomsusername wrote: »

I'm being stung for around £26 per month.

Something doesn't add up here!...

At 19.94% EAR the monthly interest is...

£600 x 1.5267% = £9.16

If the fee is £6 then that's a total of £15.16

Even if you maxed out the £1K facility the cost would be...

£1,000 x 1.5267% = £15.27

Plus the £6 would be £21.27

So you're a fiver out somewhere.