overdraft to credit card?

hmc

hi not sure where to post this
natwest agreed overdraft limit is £2400, and im upto £2000
charges at the moment are £30 a month plus £6 extra charge for something
reading martins posts i could move the od to a 0% credit card
and if not paid off in the time ive 0% i then move it again?
is this how it works? i only work part time and have wtc too so though i know id be accepted for a card it might not be for the full amount

how do they work? do the credit card pay the bank and then i pay a min amount back to card each month?
never owned a cc always just kept everything with bank and od if needed
i dont have hardly anything left each month so would i end up in a bigger mess?
any ideas how much i would need to pay back a month on £2000 over approx 24 months,(if thats what they will give me)
thankyou very much

thecassman86

Hi there :wave:

Yes, i would say transferring onto a 0% card is a good idea - your monthly charges are very high and the 0% card won't have any monthly charges. There will, however, be a transfer fee which is a % of the amount you're transferring (£2000). It's usually a couple of % but you'll have no further charges on top of that.

The type of card you're looking for is for "money transfers" - you don't need to get a card with purchases or balance transfers on there really. The idea is that you pay £2000 to your bank account using the credit card.

A couple of things you must do to ensure you stay in control of your debt though...

1) As soon as the OD is paid off, contact Natwest and get them to massively reduce it or remove it completely. You don't want to eventually have a CC debt AND an OD debt.

2) If your new credit card comes with more than the £2000 you need available DON'T spend it. Just pay off what you need and afterwards close the credit card.

3) DON'T just pay the minimum off the card. You'll be saving £30/month in OD charges so put that towards your card too. Minimum payments flag up on your credit report and you'll take forever to pay it off too. You want to try and get rid of that debt as quickly as possible.

For reference, £2000/24 months means a monthly payment of £83.33 needed to be debt free in that time. Higher payments than that will mean you're debt free quicker and lower payments mean that you'll still owe money when the 0% period is finished.

Hope that helps

hmc

thanks that helps loads
im a bit concerned i wont be able to find nearly £90 a month though i really dont have that left though of course nearly half that i would have gained from not paying natwest
plus if they wont let me have 24 months it would be more to pay back which is impossible
is it worth contacting natwest? could i arrange something with them?

thecassman86

Possibly, might be worth a try - they might even have a money transfer card of their own that will make the transfer of money easier.

Just make sure that they absolutely guarantee that any card they give you is definitely going to be 0%. You don't want this to be a case of "out of the frying pan into the fire". If you still have funds left on the card afterwards then you should be able to then get another 0% card and do the process again, provided you stay disciplined with it.

If you're unable to make payments of more than about £40/month then it's going to take you a long time to pay off - years, rather than months. What you could do is post up an SOA and we can go through your finances and perhaps find areas that could be made cheaper - it's surprising how much you can save by changing suppliers of things etc.

Go to this link: http://www.stoozing.com/calculator/soa.php, fill it in and then press "Calculate" followed by "MSE" and post it back in here. The more detail you add the more help we can offer.

You mention you're part time, is there any chance of more hours or overtime?

hmc

no im a single mum self employed cleaner working round school hrs,very vicious circle. more hrs means child care costs and a drop in wtc!
i regulaly switch utility companies and check all insurance for lowest every yr
think i will speak to natwest first as there is more going out than coming in
its tipped the £2000 as ive paid out vets bills which some of which i will get back from insurance company,eventually
had no holiday for 3 yr and then it was 3 nights away just for a break, but we enjoyed it lol

thecassman86

I can see that you're a big user of the forums so i should have guessed that you already do plenty of money saving!!

You didn't mention child benefit in your original post. Are you definitely getting all of the benefits you're entitled to? There's other things like single-person council tax as well. Might be worth typing your details on the government benefits website and it'll show you what you're entitled for.

But yes, regarding a 0% money transfer card, i'd talk to Natwest first and get some advice. But remember, they're going to have their own profits in mind so don't be swayed too much. Ensure whatever they suggest is definitely going to be fee-free and 0% interest.

hmc

thankyou for all the help, yes i get a bit of help with rent,ct, and get cb. im guilty of wanting my child to have too much i fear lol
going to ring natwest after work tonight as i presume i will need an appointment

allybee101

I agree with thecassman, don't be swayed by Natwest's focus on their profits. They may try and offer you a loan to pay off your overdraft, which they did with me.
Aside from the fact that the loan amount was higher than my overdraft (too tempting to spend the leftovers on something else), it was a long term pay back period and the repayments were fixed. If you wanted to overpay one month there were extra fees.

See if they will freeze/reduce your interest. Or they may agree to reduce your overdrift limit by a fixed amount each month (say £50).
I'd recommend you get your overdraft reduced from £2400 to £2000 straightaway - that extra £400 limit is all to easy to spend if you see it as 'available balance'.

Personally, I'm clearing my overdraft by putting money into a separate account each month. When I've accrued a chunk of money (say £100-£200) I pay that chunk off my overdraft and then have the overdraft limit reduced.

Good luck with it, you can beat it!