Paying off the overdraft with credit cards

notonker

Hi,

I have a £5,000 overdraft with Halifax that I am being charged £100 a month for. Without looking closely enough on this site, I applied for a 36 month 0% balance transfer card...only to find out that I can't use this to pay off the overdraft.

So, having looked around MSE.com a bit more, I've seen the card I need is a Money Transfer card. Either MBNA Platinum (24 months) or Fluid (29 months) seem to be the best. Paying off £5,000 (plus card fee) over 29 months isn't going to be realistic, so I'm likely going to be left with around £2,000 at the end of the 29 months.

My question is: At the end of the 29 months, will I be able to apply for balance transfer card (like the one I just wrongly applied for!) and transfer the remaining £2,000 from the money transfer card to the balance transfer card, and then close former card? Obviously that all depends on me being accepted for a balance transfer card at the end of the 29 months, but if so, is that something you can do with a money transfer card?

Alternatively, anyone have a better idea of getting rid of the £5k overdraft as efficiently and cheaply as possible?

Thanks in advance!

grumbler

notonker wrote: »

...My question is: At the end of the 29 months, will I be able to apply for balance transfer card (like the one I just wrongly applied for!)

No problems.

and transfer the remaining £2,000 from the money transfer card to the balance transfer card, and then close former card? Obviously that all depends on me being accepted for a balance transfer card at the end of the 29 months,

Surely

but if so, is that something you can do with a money transfer card?

A 'money transfer' card is no different from a normal CC except the introductory offer.

Alternatively, anyone have a better idea of getting rid of the £5k overdraft as efficiently and cheaply as possible?

Long-term low-rate cards

A Spending 0% Card can be useful too as it allows essentially borrowing money at 0% without paying BT fee.

jpsartre

notonker wrote: »

Alternatively, anyone have a better idea of getting rid of the £5k overdraft as efficiently and cheaply as possible?

Use your creditcard whenever you can and use the money you "save" to cover the overdraft. That way you effectively transfer the overdraft to the creditcard.

grumbler

jpsartre wrote: »

Use your creditcard whenever you can and use the money you "save" to cover the overdraft. That way you effectively transfer the overdraft to the creditcard.

Which one? I guess the OP doesn't have any that offers 0% on purchases. If it's not 0% then it can be more expensive than current effective 27% APR that the overdraft costs - especially if the overdraft cost almost doesn't depend on the balance.

jpsartre

My bad, I read the OP as saying he had card with 0% on purchases.

notonker

Thanks for the answers, Grumbler.

Regarding:

Long-term low-rate cards

I hadn't thought of this type of card, as I assumed it would be cheaper to get a loan. But if accepted at 6.4% and if the balance covers the £5000, then that's a good one to consider.

Spending 0% Card can be useful too as it allows essentially borrowing money at 0% without paying BT fee.

Would spending include me 'spending' by paying a large chunk (ideally the whole £5,000) from the credit card into the overdraft account? So I'd be clearing all or most of the overdraft and then be paying back 0% on the card, or have I misunderstood?

SuperHan

notonker wrote: »

Spending 0% Card can be useful too as it allows essentially borrowing money at 0% without paying BT fee.

Would spending include me 'spending' by paying a large chunk (ideally the whole £5,000) from the credit card into the overdraft account? So I'd be clearing all or most of the overdraft and then be paying back 0% on the card, or have I misunderstood?

No...

You would put your normal spend on the card, so all of the cash you receive would go to paying off your overdraft, and your monthly living expenses would be essentially nil.

However, this just then leaves you with a large credit card balance at the end of the period which you would then have to tackle.

notonker

SuperHan wrote: »

No...

You would put your normal spend on the card, so all of the cash you receive would go to paying off your overdraft, and your monthly living expenses would be essentially nil.

However, this just then leaves you with a large credit card balance at the end of the period which you would then have to tackle.

Ah ok, thanks for clarifying!

YorkshireBoy

The problem for the OP is that their account charges a daily fee, not interest, so the 'spend your way out' option won't work. Its all or nothing I'm afraid and reliant on them dropping a tier, ie £3/£2/£1 per day.

notonker

YorkshireBoy wrote: »

The problem for the OP is that their account charges a daily fee, not interest, so the 'spend your way out' option won't work. Its all or nothing I'm afraid and reliant on them dropping a tier, ie £3/£2/£1 per day.

indeed, i hate seeing how much i'm spending on the overdraft when i know it can be handled a different way.

JimmyTheWig

notonker wrote: »

My question is: At the end of the 29 months, will I be able to apply for balance transfer card (like the one I just wrongly applied for!) and transfer the remaining £2,000 from the money transfer card to the balance transfer card, and then close former card?

Yes, that's fine.
The only potential problem is...

Obviously that all depends on me being accepted for a balance transfer card at the end of the 29 months

As you say you might not get a new card at the end of that. Your circumstances might have changed so you no longer qualify, or banks might not be doing them, etc.
But in general, yes, that's the way to go.