Credit card help please

edited 30 November -1 at 1:00AM in Stoozing: Free Cash from Credit Cards
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amyscamamyscam Forumite
1 Post
Hi, I have never had a credit card before but want to clear my £2800 overdraft as I am getting £50 charges a month(I can pay back £100 a month). I heard that some credit cards can put money in your account for 0% interest for a certain amount of time. Would anyone know the best one to apply for please? Thanks.

Replies

  • TixyTixy Forumite
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    You would need that offers money transfers (aka a super balance transfer card).

    The main card issuer that offers money transfer credit cards to new customers is MBNA.

    However if you have never had a credit card before, and if you are constantly in your overdraft then you may struggle to get accepted for an MBNA card.

    If you were accepted you would be charged a money transfer fee on the transfer.
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  • bargainbettybargainbetty Forumite
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    Part of the Furniture 1,000 Posts Name Dropper Debt-free and Proud!
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    Go onto the credit card section of this website and look it up. There is advice there for everything.

    If you can afford to pay back £100 per month, why are you not reducing your overdraft by £100 per month? You could also look at a different bank account (without an overdraft) or converting the sum into a loan and removing the overdraft altogether.

    It is generally advised that you use one of the budget tools on here to see where you can save money or reduce expenditure, so you don't run up another debt once you've refinanced this one. Worth a look, it helped me a lot.

    Good luck
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  • What are your income and outgoings?

    Even if you can't get a money transfer offer, you might be able to get a long tern 0% purchase offer (tesco, sainsbury, Halifax do over 18 months). Do all your monthly spending on the purchase credit card (instead or cash or debit card transactions) and then use the cash that you would have spent to pay off you overdraft. This way you are slowly transferring your debt from overdraft to the credit card.

    Obviously this wont be helpful if you don't have any income or outgoings but lets say if you have regular outgoings £400 which you normally can normally repay, then you would be able to close your overdraft in 6 months (transferring about £2400 of debt onto the credit card and paying up to £600 down as you say you can do £100 per month). This is slower than a money transfer so will have higher interest charges on your overdraft and takes more more work but save's you on the typical 3% balance transfer fee.

    As you've never had a credit card I'd stress 4 rules.
    1) DON'T SPEND MORE THAN YOU WOULD NORMALLY SPEND JUST BECAUSE YOU HAVE A CREDIT CARD
    2) ALWAYS SET UP A DIRECT DEBIT TO PAY AT LEAST THE MINIMUM AMOUNT
    3) MAKE AN EXTRA PAYMENT MANUALLY IN THE FIRST MONTH (as some direct debits can only come out after 1st payment, I have been caught out by this twice)
    4) Note the expiry of the special rate and PAY OFF BALANCE before it ends.
  • If you can afford to pay back £100 per month, why are you not reducing your overdraft by £100 per month?

    I think OP means that they can make repayments of £100 per month and not reduce the debt by that amount. If there is £100 in repayment and £50 interest then debt is only going to be reduced by£50 each month initially. So would take about 40 months to clear.

    Let's say he could do a 0% balance transfer for a 3% fee he would be able to clear the debt in 29 months and thus save £1100
  • YorkshireBoyYorkshireBoy Forumite
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    Winrick wrote: »
    Even if you can't get a money transfer offer, you might be able to get a long tern 0% purchase offer (tesco, sainsbury, Halifax do over 18 months). Do all your monthly spending on the purchase credit card (instead or cash or debit card transactions) and then use the cash that you would have spent to pay off you overdraft. This way you are slowly transferring your debt from overdraft to the credit card.
    £50 a month charges on the £2,800 current account O/D is not down to debit interest alone. More likely the OP has an account which charges a daily fee for overdraft use, such as Halifax and their £1-3 per day charging structure. If this is the case, then transferring grocery shopping and fuel purchases, for example, to a 0% on purchases card will not make a dent in the charges.


    If, however, the OP has a standard debit interest O/D, then the rest must be made up of unauthorised O/D charges...in which case they can forget about an MBNA card if the current account status is being reported to the CRAs.
  • £50 a month charges on the £2,800 current account O/D is not down to debit interest alone. More likely the OP has an account which charges a daily fee for overdraft use, such as Halifax and their £1-3 per day charging structure. If this is the case, then transferring grocery shopping and fuel purchases, for example, to a 0% on purchases card will not make a dent in the charges.


    If, however, the OP has a standard debit interest O/D, then the rest must be made up of unauthorised O/D charges...in which case they can forget about an MBNA card if the current account status is being reported to the CRAs.

    Good points
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