Financial Juggling

bresych

Hi
I had recently come to the end of an interest free period on my credit card so did a balance transfer onto a new card at 0% for 31months . I transferred two card balances over at a total of £950. I am also £700 overdrawn in the bank which costs me £10 per month in interest. My bank allows a £200 free overdraft so my question is, can I withdraw £500 cash using one of my recently cleared (debt transferred) credit cards, use that £500 cash to get my overdraft down to within the free zone and then add another balance transfer for the £500 onto my new credit card. The card company says I have 3 months to transfer any balances at the 0%rate. Will this plan for an interest free loan work? I don't foresee any problems in paying back 50-£100 per month so should clear the debt before the interest free term expires.

Hope this makes sense.

Thanks

ellesbellesxxx

Won't you get charged for taking out the cash?

bresych

I've never withdrawn cash on a credit card, sodon't know how it works. I thought cash withdrawals just paid a higher rate of interest and if I transferred the balance straight away then I wouldn't incur the higher rates? Not tgat simple then?

Siamese

I think you'll get charged a handling fee - could be 2 or 3 % for withdrawing cash, so your overdraft is probably cheaper. Unless you also get 0% on purchases with your new card? Use it to buy food, petrol etc. and leave the money you would have spent in your bank account to gradually reduce the overdraft.

bresych

3% handling fee would be £15 plus transfer fee. 1 months interest is £10. If it takes more than 3 months to pay off the overdraft then wouldn't the cash withdrawal option be cheaper?
Think I might just make minimum payments on the card and larger payments on the overdraft until the overdraft is below £500, this should take about 10 months. Was just wondering if the above would work, but it's a bit of a complicated way of doing things.

sourcrates

bresych wrote: »

3% handling fee would be £15 plus transfer fee. 1 months interest is £10. If it takes more than 3 months to pay off the overdraft then wouldn't the cash withdrawal option be cheaper?
Think I might just make minimum payments on the card and larger payments on the overdraft until the overdraft is below £500, this should take about 10 months. Was just wondering if the above would work, but it's a bit of a complicated way of doing things.

Aren't the interest rates a lot higher on cash advances on a credit card ?
Better check the small print on your agreement before you do anything.

bresych

I thought, even if the interest charges were a lot higher, if I did a balance transfer onto my interest free card then I wouldn't pay the interest only the handling fees.
Doesn't matter, I will just concentrate on getting the overdraft below £200 before I start worrying about getting rid of the card debt. Should've paid more attention to the overdraft in the first place but I just got distracted by the higher amounts on my cards.
Thanks anyway.