Cash Transfer Credit Card... or Stick With Normal Repayments

chrislk89

Hi, I need a bit of advice as to the best way to pay off some over draft debt.

Not long out of uni I have a couple of over drafts totalling 2.8k.

With a view to applying for a mortgage in the not so distant future, I am focussing on getting these repayed as quickly as possible.

I have never had a credit card or loan however I wondered whether I am best to keep reducing my overdraft each month when I get paid, or to use a cash transfer credit card with a 0% deal and 4% fee to pay them off first and then repay the credit card. My logic was that by using the cash transfer credit card I will not only have got rid of the overdrafts but also building up a good credit history by making overpayments on the credit card.

Please advise.

Thank you.

Tixy

You may well struggle to get a first credit card that offers money transfers with a 0% promo period and with a £3k limit.

However if you could - what interest rate or fees are you being charged for the overdrafts? How much will you be able to repay to these debts a month?

chrislk89

On one overdraft ov £1400 I am paying around £16 a month interest and on the other of equal amount I am paying £8 a month.

I am able to pay around £500 per month.

Thanks for your help

chrislk89

Tixy wrote: »

You may well struggle to get a first credit card that offers money transfers with a 0% promo period and with a £3k limit.

However if you could - what interest rate or fees are you being charged for the overdrafts? How much will you be able to repay to these debts a month?

On one overdraft ov £1400 I am paying around £16 a month interest and on the other of equal amount I am paying £8 a month.

I am able to pay around £500 per month.

Thanks for your help

Tixy

If these accounts are not being used for day to day banking, and those interest amounts are just based on a constant outstanding balance then it would be cheaper to stick with the overdrafts and just pay them off over the next 6 months rather than incur a 4% balance transfer fee (paying off the one with the higher interest rate/charge first).

chrislk89

Tixy wrote: »

If these accounts are not being used for day to day banking, and those interest amounts are just based on a constant outstanding balance then it would be cheaper to stick with the overdrafts and just pay them off over the next 6 months rather than incur a 4% balance transfer fee (paying off the one with the higher interest rate/charge first).

Thank you for your advice, and as fair as improving/building a credit history would you advise taking a purchase credit card spending a little on it each month and paying it off in full ?

Thanks