Maths question...can someone clever work this out?

mintymoneysaver

I want to book a last minute holiday, for £1400 at most.
Now at the moment I have £950 in my bank but at the end of the month would have another £200 to put to that and would be able to pay it all back by the end of September.
So here are my options...
!) use my tesco card interest free for 3 months, plus tesco points but 2% extra to book the holiday by credit card or...
")Use my £950 and more as I have a £1000 overdraft on that account at a rate of 1.54% a month.

Any mathematical geniuses out there who can tell me how much extra it would cost me either way?

Thanks.

patwa_2

OK, not mastermind but:

A £1400 holiday would cost you a £28 charge booking via CC (2% fee).

I assume the overdraft is compounded (here's where I'm unsure) but on £1000 1.54% works out at £15.40.

So without getting into exact figures over three months you'd be at least £45 down in overdraft fees (is that right?) so the £28 would be cheaper. Also you'd have the 3 months to pay off the balance without banks yelling at you. Plus the Tesco points could go towards your shopping, and you can use that voucher value thing (where the vouchers can be redemed for more than what Tesco say they're worth - something about it on MSe ages back but not sure if still valid).

Sorry if I'm going wrong here, but no doubt someone will correct me.

H.

wannabedebtfree_2

Ok, the way I understand it is at the moment you are £450 short yeah?

So, if the holiday company will allow you to put the £450 seperately on your CC, paying the rest by your bank card then the CC charge would be £9.

£450 into your overdraft for one month (august) would be £6.93, then with the additional £200 going into your account would leave you with £250 for one month (september) which would be £3.85 = £10.78

So there's not much in it, if you paid the £450 on the CC it would save you about £1.78, plus you would get £18 of clubcard deals (£4.50 to spend instore) which is a £9 "profit" (in deal vouchers) alternatively, if you put the whole holiday on the Tesco CC you would be charged £28 (as the OP said) but you would get £56 of clubcard deals (£14 in-store) a £28 "profit" (in deals)

Personally - I would slap the whole lot on the Tesco CC and pay it back as soon as you can, you have £950 already, but the £28 "profit" would sway me!!!

suffolkb

I think that you get more protection if you pay by credit card. I.e - if the holiday firm goes bust, you get your money from the CC.

mintymoneysaver

Thankyou for all that. I never thought of splitting it between what I already had and what I needed IYSWIM?

So I'll either split it like that or put it all on my card as you're right, in theory there I actually make a profit!