Clearing that overdraft

YNWA_123

Hi,

I have an overdraft (£2000) that I want to get rid off as I am charged between £1-£2 a day for it.

Now I have a credit card that I have not used but have the money available on it to transfer to my bank to clear the overdraft. Saving me £30-£60 a month.

Now I know the money transfer will incur a 20% APR, however I also have a credit card with a 0% for 25 months balance transfer offer on it.

Would it be possible to do the following...

1) Send £2000 from Credit Card 20% APR to my bank
2) Reduce my overdraft to £0 so I can not spend it again
3) Transfer £2000 from Credit Card 0% Balance Transfer to my 20% APR card, thus clearing its balance again.
4) Send say £50-£60 amonth to my 0% card clearing the balance over the 25 months.

Is it worth it?

Reason I feel like I need to do this is because I want my overdraft gone, I keep clearing some but finding I need to spend it on food, petrol etc... so I am always £1500-£2000 a month overdawn (authorised O/D). I just cant seem to shift it.

What you think?

Thanks

jamesd

Yes, it's worth doing. Check that your 0% for 25 months balance transfer card doesn't also allow money transfers. It's quite common. If not, what you're planning using two cards is OK.

Best to leave the overdraft facility in place because that protects you from charges due to insufficient funds in the account. Try pretending that £100 or £500 or whatever is your "zero" balance and not going under that, so you stay out of the overdraft.

Aquamania

YNWA_123 wrote: »

Hi,

I have an overdraft (£2000) that I want to get rid off as I am charged between £1-£2 a day for it.

Now I have a credit card that I have not used but have the money available on it to transfer to my bank to clear the overdraft. Saving me £30-£60 a month.

Now I know the money transfer will incur a 20% APR, however I also have a credit card with a 0% for 25 months balance transfer offer on it.

Would it be possible to do the following...

1) Send £2000 from Credit Card 20% APR to my bank
2) Reduce my overdraft to £0 so I can not spend it again
3) Transfer £2000 from Credit Card 0% Balance Transfer to my 20% APR card, thus clearing its balance again.
4) Send say £50-£60 amonth to my 0% card clearing the balance over the 25 months.

Is it worth it?

Reason I feel like I need to do this is because I want my overdraft gone, I keep clearing some but finding I need to spend it on food, petrol etc... so I am always £1500-£2000 a month overdawn (authorised O/D). I just cant seem to shift it.

What you think?

Thanks

In response to your numbered points:

1. Yes, if your credit card company allow you to carry out a money transfer - most do not unless specifically advised otherwise. If permitted, a transfer charge usually applies - typically 2-3%

2. Reducing your overdraft to £0 will not necessarily stop you spending money you do not have. At best the bank will refuse the transaction and you will incur an unpaid item charge. At worst the bank will allow you to spend the money you do not have and you will incur unauthorised overdraft charges.
Only you can ensure you do not spend money you do not have.
(but borrowing on an authorised overdraft is cheaper than the 2 alternatives I give above)

3. Yes. A charge will again apply typically 2-3%

4. Even at £60 per month repayment, after 25 months you will only have repaid £1500

tinkerbell28

Personally of you're having to dip into the overdraft to cover fuel and food...essentials.

You're living beyond your means and it won't get better until you learn to budget.

You will reduce your o/d then find yourself putting stuff onto the 20% apr card as it's there and these things happen.

So I'd cancel that card as well when it's done.

grumbler

YNWA_123 wrote: »

...
2) Reduce my overdraft to £0 so I can not spend it again

Most likely this will result just in extra charges for using unauthorised overdraft end bounced DDs.
Much better is to keep it for emergencies and resort to your willpower instead.

zerog

Aquamania wrote: »

1. Yes, if your credit card company allow you to carry out a money transfer - most do not unless specifically advised otherwise. If permitted, a transfer charge usually applies - typically 2-3%

In this case a money transfer is not required, the OP could just withdraw cash from an ATM as he is going to accept the high cash interest for a day or so, until his 0% card repays it.

opinions4u

What's your plan to actually reduce the debt?

Aquamania

zerog wrote: »

In this case a money transfer is not required, the OP could just withdraw cash from an ATM as he is going to accept the high cash interest for a day or so, until his 0% card repays it.

I doubt any ATM will dispense £2000

Aquamania

opinions4u wrote: »

What's your plan to actually reduce the debt?

As I understand it, it is proposed to use the (upto) £60 per month currently spent on interest/charges to reduce the capital owed

grumbler

Aquamania wrote: »

I doubt any ATM will dispense £2000

To clear the overdraft the OP doesn't need a lump sum