Is it worth me getting a credit card?

Sky1982

Hi All!

Just joined after lurking for various reasons, however, I haven't been able to find a thread that lost related to my current situation so here I am!

I'm living at home, I have a permanent full time job and a car on finance. I've got a £900 Santander overdraft and I've had it for years; I managed to get it down a few years ago by paying off £50 a month but last year I needed funds so it crept back up. It's costing me around £20 a month just to have this overdraft, and I'm always in it.

Would it be worth getting a 0% credit card to transfer the overdraft to and pay this off? Or should I just man up and start paying £50 a month again?

I've never had a credit card, I'm 32 soon so I'm pretty self controlled with my salary. I was also looking to get a credit card to book flights or a holiday with, for ease of use and also insurance/protection when booking. Perhaps there's a card I could do both with, or maybe get one for the overdraft transfer and another for the holidays?

Any advice is gratefully welcomed

grumbler

MissSCM wrote: »

... I've got a £900 Santander overdraft and I've had it for years; I managed to get it down a few years ago by paying off £50 a month but last year I needed funds so it crept back up. It's costing me around £20 a month just to have this overdraft, and I'm always in it.

Would it be worth getting a 0% credit card to transfer the overdraft to and pay this off?

It will cost you to transfer and will give you only £20 extra each month to pay it off. Not much really for paying £900 off while 0% lasts.

Or should I just man up and start paying £50 a month again?

You should man up and start paying more than £50 regardless.

I've never had a credit card, I'm 32 soon so I'm pretty self controlled with my salary.

I have a different opinion on this as you seem to have no savings and have been living in overdraft for years. Overdrafts are meant to be used for emergencies only.

I was also looking to get a credit card to book flights or a holiday with, for ease of use and also insurance/protection when booking.

Protection - yes. Insurance - no. And it's not easier to use than a debit card. Travel companies often charge extra for CC payments.

Perhaps there's a card I could do both with, or maybe get one for the overdraft transfer and another for the holidays?

IMHO you have to avoid borrowing for holidays, but feel free to ignore my opinion.

For transferring the overdraft see the money transfer guide.

However, a Spending 0% Card card can be easier to get. You can spend on it and use the 'saved' money to pay the overdraft off. And you can get deeper into the debt by buying your holiday on it.

Use the eligibility checker before applying for real.

Wilkins

MissSCM wrote: »

I'm living at home, I have a permanent full time job and a car on finance.
Any advice is gratefully welcomed

Parental home? If so, you cannot manage your money. At 32, with few necessary outgoings, you should have substantial savings and no unsecured debt or overdraft. How will you manage when you are older?

If I have misunderstood the situation, then I apologise.

YorkshireBoy

Transferring the O/D to an MBNA card (the best card for this) will result in a £25 per month minimum payment (and cost you a £36 fee).

That sounds like it'll be more than you're paying off your overdraft each month now (£20 in fees/interest and running it up again through the month)?

So where will the extra fiver come from?...and please don't say the overdraft otherwise you'll have two £900 debts in a couple of years - please say you're going to earn more and/or spend less!

Sky1982

I do have savings, I never said I didn't. My savings are exactly that, savings. My mother isn't working, father left years ago and I pay rent every month because she needs the money more than I and we own the house. Home improvements are paid for by us. Quite a judgemental bunch on here it seems, I was only after a bit of helpful advice.

YorkshireBoy

MissSCM wrote: »

I do have savings

You're paying £240 a year for the overdraft...far more than you're earning on your savings in interest. Unless you've abused the Santander account (ie gone unauthorised overdrawn) then there should be no risk of them removing the facility if you transfer the savings to the current account...assuming you've more than £900 of course? If you haven't, then don't pay anything off because you'll still incur the £1 per day (capped at £20 per month) charges no matter what the debit balance.

I was only after a bit of helpful advice.

So how did the MBNA card application go then?

Wilkins

MissSCM wrote: »

Quite a judgemental bunch on here it seems, I was only after a bit of helpful advice.

Indeed, because judgments need to be made, and you have been given helpful advice. If you have savings, then you should not also have an overdraft which is costing you money. It is likely that you are throwing money away.

Pay off the overdraft in full, maintain a positive balance and then rebuild your savings.

grumbler

MissSCM wrote: »

I do have savings, I never said I didn't. My savings are exactly that, savings.

MSE article: Should I Repay Debts or Save?

vns

Just a note, you might not even be accepted for a 0% card due to your 'poor' credit history (jumping into OD regularly). You'll need to build your credit score first.

I'm sorry for your personal situation.

From reading this thread, you should pay off your OD with your current savings.

lynz68

If you have never had a credit card before you will find it difficult to get a 0% credit card these are usually only reserved for those who have used credit cards successfully.

If you do manage to get one make sure you pay it off before the 0% interest runs out.

Unless your savings are earning you more interest per month than your overdraft is costing you, which I doubt, it makes more sense to just pay the overdraft off completely and then rebuild your savings.

yalisrib

Personally I would use my savings to pay off the overdraft (maybe cancel the OD to avoid temptation) and then instead of chucking money at a debt and fees, start saving that money into a new account - pick a target you want in your savings account this time next year and aim for it.
Just be VERY careful when getting a credit card - you plan on using it to pay for a £500 holiday which you will pay off within a year, next thing you know, you'v used it to buy suncream, a suitcase and a flat scren TV in the sales. Make sure once you've paid for the holiday, you cut up the card and set up direct debits to pay it off