Help With Debt/Credit Score

SavingBrad

Hello i have very poor credit score and cant get any credit at all. Ive somehow been accepted for the barclaycard initial which is the first way of increasing my credit.

I have a limit of £800 on the credit card

I have an overdraft of £350 (got it down from £2000)

I really want to wipe my overdraft using this card so that i can make payments back on the credit card to obviously help increase my credit score. ive got 3 months interest free on purchases.\

just want some opinions on this and is this worth doing?

MallyGirl

This would be a money transfer not a purchase so would not be 0% and would incur a fee of typically 4%. It may not be possible at any price from your card. Can you clear the £350 in 3 months? Otherwise is the standard APR on the credit card less than the overdraft rate? If so then just make minimum payments to the card and use the liberated money to pay off the overdraft

SavingBrad

Sorry i also forgot to mention ive got a £500 wonga (which can be paid next week) but i was basically wanting my overdraft/wonga both paid off then just make payments on my credit card every month that way me paying my credit card off will increase my credit rating and also have my wonga and overdraft paid off so its a few months off having no debt on my credit file.

appreciate your help

Tixy

If you do your normal spending on the credit card instead of your debit card then you will therefore leave more money in your bank account and clear your overdraft.

That said are you able to repay the full £350 within the 3months 0% interest? If not then due to the high APR on your credit card at the end of the 3months its likely worth paying off any remaining credit card balance, even if that puts you back in your overdraft for a couple of months.

SavingBrad

Thanks for the reply i can pay my overdraft off in 3 months (currently have no fees attached to it for an extra 3 months) i just really want to get all my debt cleared and start paying money off a credit card mainly because i have very poor credit and just really want to start building this up i dont mind paying slightly more on a credit card if it meant i could have my debt cleared

Tixy

Putting the debt on to the credit card won't mean its cleared, just moved. If you are going to repay it within 3months anyway then given the small amount of the debt it will likely make little difference whether you leave it on the overdraft or gradually move it to the credit card by new spending.

In terms of building your credit rating up I would just use the card for a couple of purchases a month and repay in full each statement.

SavingBrad

Using my credit card now though will give me a 3 months head start on increasing my credit score though and i dont mind paying the extra for a few months to get my score going as its been very poor for far to long and im at a point where i will do anything to get it going. i cant afford to buy anything with it at the moment as it would be just going towards clearing my overdraft. i have a 33% apr which is better than the 39% that i thought it would be. does anyone know if i was to withdraw £500 how much id have to pay back over the course of 2 months with that apr? im awful when it comes to working these things out.

Again thanks for all your replies

pogg000

Drawing cash on a credit card will have a negative on your credit file

bsms1147

£15-20

It will be treated as a cash advance though and will appear on your credit file as such. Many lenders view these negatively as they indicate cash-flow problems.

Pay off the Wonga ASAP and be patient with the overdraft. 3 months isn't a long time in the grand scheme of things.

SavingBrad

Im a very impatient person and just want things to be sorted smoothly while increasing my credit score. the wonga loan will be paid next week but then it leaves me with only a small amount to last me a month till next payday which was kinda the reason why i thought take £500 from my credit card pay off the £350 wonga and id still have just enough to live for the next month about £50 a week then on the next pay i would pay about £300 then £250 the pay after. appreciate the reply just dont know what to do lol.

bigadaj

Just put all your normal spending through on the card. This will buy you a months breathing space at least, and then just try to continue paying as much off the card as you can every month.

I assume the interest rate is fairly high on the initial card but it's nowhere near a payday loan cost. Assuming its 3% per month then leaving £500 on the card will cost you £15 a month in interest, which will reduce as you pay it off, not cheap but a lot less than a payday loan.