Overdraft or Credit Card - which is cheaper?

skm1960

Please excuse my ignorance but I am not a financial wizard, this one has always confused me.

I have credit card debt @ 15.95% and I also have an overdraft with the Nationwide, I end up paying £1/day in fees.

What is costing me more?

Am I better working on getting rid of the O/D or should I focus on the CC debt?

Thanks in advance.

Drp8713

It depends on how much you have on each. Percentages are better for small numbers, fixed fees are better for big numbers.

Can you not get a balance transfer card with a low or 0% to transfer the CC to? There are also cards which can pay amounts to your bank account to pay off the overdraft.

YorkshireBoy

Which Nationwide current account charges £1 per day? FlexAccount is interest based, and FlexPlus/FlexDirect are 50p per day.

skm1960

FlexDirect acc - being charged £28/month in OD fees. I didnt realise that you could get a CC to transfer a balance to cover an OD.

YorkshireBoy

skm1960 wrote: »

FlexDirect acc - being charged £28/month in OD fees.

So you're incurring unauthorised overdraft fees of £5 per day, in addition to the 50p per day authorised overdraft fees?

If so, and they report it to the CRAs, this may impact any application for a money transfer credit card.

What's the credit card balance?...and credit limit?

Ben8282

YorkshireBoy wrote: »

So you're incurring unauthorised overdraft fees of £5 per day, in addition to the 50p per day authorised overdraft fees?

If so, and they report it to the CRAs, this may impact any application for a money transfer credit card.

What's the credit card balance?...and credit limit?

Or are they charging £1 per-day over a 28 day month? Its not clear.

If you are in a unauthorised overdraft situation, I would immediately take a cash advance from the credit card to repay the unauthorised part of the overdraft and bring your current account back within it's authorised overdraft limit. You will pay a fee for the cash advance (usually £3 per £100) and attract interest from day 1 but this is better than the £5 per-day you are currently paying plus the bank is reporting this unauthorised overdraft and taking a cash advance on your credit card is not as bad as an unauthorised overdraft. From your post it looks as if you have been in this unauthorised overdraft situation for some time and would suggest you rectify it as a matter of urgency if you have available credit on your credit card.


As to a better solution and assuming that you have sufficient available credit on your credit card, ask the credit card company if you can do a money transfer directly into your bank account to repay the authorised overdraft. If not, then consider spending via the credit card to build up the balance then allow the overdraft to be paid off with the money being spent on the credit card. 15.95% is not too awful.


The next step will be to obtain a 0% card to transfer the balance but this may be difficult if your credit report shows the unauthorised overdraft and heavy overdraft use.

skm1960

Sorry I dont think I have made myself very clear.

I have an authorised OD on this account and I pay £28/month in fees as a result of it.

CLAPTON

skm1960 wrote: »

Sorry I dont think I have made myself very clear.

I have an authorised OD on this account and I pay £28/month in fees as a result of it.

n/wide web site say the fees are 50p per day arranged and £5.00 per day unarranged

what is you arranged OD limit
what is you maximum actual debit balance during the month?

Candyapple

skm1960 wrote: »

Sorry I dont think I have made myself very clear.

I have an authorised OD on this account and I pay £28/month in fees as a result of it.

1. How much do you owe on your overdraft?

2. How much do you owe on your credit card?

3. What is the name of your Nationwide account - e.g. is it FlexPlus, FlexDirect etc?

skm1960

I have an authorised OD of £1350, with a FlexDirect acc which I use each month.

£2300 owed on the CC.

CLAPTON

skm1960 wrote: »

I have an authorised OD of £1350, with a FlexDirect acc which I use each month.

£2300 owed on the CC.

nationwide website say they charge either 50p or £5 per day in OD fees so it is a little difficult to see where £28 per month comes from


as the charge is a per day charges then it would be helpful if you could say (on average)

-are you over drawn every single day of the month?
-if not how many days on average are you overdrawn?
-is your balance ever overdrawn by more than 1,350?