Cc money transfer ??

hmchmc Forumite
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Hi all, briefly, I have an agreed overdraft limit of £2000. I'm around 1500 into it sometimes get it down to 1100 but it's crept up again
I'm paying around £30 a month in charges on this which is madness as this could be coming off my debt
I only just earn enough to live on and it has crept up on emergencys
If I did one of these money transfers like from virgin at 0% for 32 months or whatever would this work for me do you think or would I struggle to pay it back in the time or can you then do the same again if not paid off in time?
What would be the minimum amount to pay a month on the amount I'd need approx as I know they are all different. Hope I've given enough info
Work part time single parent no credit cards loans or anything else
Thankyou

Replies

  • sourcratessourcrates Forumite
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    Hi,
    Instead of further borrowing, why not ask the bank if they will suspend interest and charges for a while ?
    Get yourself a new basic bank account, with no overdraught, and pay the old one off over time, as and when you can.

    That would make more sense don't you think ?
    Ex MSE Board Guide.

    More than a third of IVA`s fail....fact.
    Could A Debt Relief Order help you ?
    Never pay a fee for a Debt Management Plan.
    For free non-judgemental debt advice, contact either : Stepchange, National Debtline, or CitizensAdviceBureaux.
  • SeduLOUsSeduLOUs Forumite
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    Post above is a good suggestion, but if you are up to date with repayments the bank may not be willing to suspend the interest.

    A 0% money transfer isn't a terrible idea as it will prevent you paying any more interest (as long as you don't do anything silly like going back into the overdraft again). If you don't manage to clear the balance in full by the time the 0% period is up you could then get an ordinary 0% balance transfer card to shift any remaining balance to.

    The sticking point might be that you don't have any cards or loans already so not much credit history to go off - if that's the case it might be unlikely that you get accepted for the cards, and even if you do the limit they give you might not be enough to clear the overdraft.

    Try the MSE Eligibility calculator to see how likely it is that you would be accepted before applying for anything: https://creditcards.moneysavingexpert.com/?money-transfers
  • Just my personal opinion, but I'd definitely rather have a 0% card than an overdraft as an overdraft can be cut or called in at any time.

    You can shift the balance again at the end of a 0% period, so long as someone else will actually give you a card. Word of warning: I essentially ran up my debts by doing this several times, often borrowing more and rarely paying back anything more than the minimum. Don't do that. Make a plan to actually pay it back and do it.
  • hmchmc Forumite
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    Thanks for the quick replys
    Bank dont recommend suspending charges , something to do with I wouldn't be able to get credit for 6 years ? Went over my head to be honest and could t understand man on the phone
    I've done mse check and 100% likely to get the mb whatever one down to 80% virgin
    So if I got a bank account with another bank would I use it for everything? So benefits paid in and dd going out ? I could leave say the child benefit 1 child , in existing bank to creep overdraft down
  • edited 30 December 2015 at 9:45AM
    sourcratessourcrates Forumite
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    edited 30 December 2015 at 9:45AM
    hmc wrote: »
    So if I got a bank account with another bank would I use it for everything? So benefits paid in and dd going out ? I could leave say the child benefit 1 child , in existing bank to creep overdraft down

    Yes, what you suggest above is a good plan !!

    You may find writing to the bank more beneficial than using the phone, head your letter "COMPLAINT", I can almost guarantee you will get a very different responce when done correctly.

    They will be referring to the fact that putting you on a payment plan will register negative information about your account, on your credit file.

    You would need to decide wether clearing the OD was more important than a black mark on your credit report.

    If you go for a new account, make sure it's a basic account, they are not widely advertised, so you need to search for them, if you don't, you will just end up with another current account plus overdraught, and you will be at square one again.
    Ex MSE Board Guide.

    More than a third of IVA`s fail....fact.
    Could A Debt Relief Order help you ?
    Never pay a fee for a Debt Management Plan.
    For free non-judgemental debt advice, contact either : Stepchange, National Debtline, or CitizensAdviceBureaux.
  • edited 30 December 2015 at 9:47AM
    SeduLOUsSeduLOUs Forumite
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    edited 30 December 2015 at 9:47AM
    If you get the money transfer card you don't need to change banks. You can either use self-discipline to not go into the overdraft again, or a better option might be to ask the bank to remove the overdraft facility once the money has cleared from the transfer card.

    If you can't clear the overdraft in one go because the limit isn't high enough, then an option might be to open a new bank account elsewhere to use as your main account, then just set up a standing order to pay off the remainder of the overdraft on the old account gradually - it can be quite difficult to climb out of overdraft when it is in your main account, but many people think that treating it as a separate debt can often make it easier to manage.

    I wouldn't recommend complaining to the bank. They normally only freeze interest when an account is in arrears and you are struggling to repay which doesn't seem to be the case. If you up and leave the bank and then demand by complaint that they freeze all interest you are effectively telling them that you are in financial difficulty. They might then slap your file with a default (which will remain for 6 years), or worst case scenario they might revoke the overdraft facility and demand it be repaid in full immediately.

    You aren't struggling with repayments, you just want to reduce interest. Getting a money transfer card will solve this, and as posted by another user will reduce the risk of the credit line being pulled from under your feet.
  • hmchmc Forumite
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    Thankyou so now to decide on the best option for me! I've always had an od all my life sort of treated it as a cc for emergencys or as I'm self employed for when I'm off work and no money coming in! But I want to start over
    So I could just go into say lloyds and ask to open a basic account ? Then I transfer benefits and dd over to it (do bank help with this?) would they ask about my other overdraft? Then I live totally off lloyds and just pay off od with natwest?
    I couldn't open a basic with natwest and do the same? Sorry for being dim never changed bank in 30 years!
  • sourcratessourcrates Forumite
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    hmc wrote: »
    Thankyou so now to decide on the best option for me! I've always had an od all my life sort of treated it as a cc for emergencys or as I'm self employed for when I'm off work and no money coming in! But I want to start over
    So I could just go into say lloyds and ask to open a basic account ? Then I transfer benefits and dd over to it (do bank help with this?) would they ask about my other overdraft? Then I live totally off lloyds and just pay off od with natwest?
    I couldn't open a basic with natwest and do the same? Sorry for being dim never changed bank in 30 years!

    Never bank were you have debt.

    Lloyds offer a very good basic account, opened one myself last week, online, took 5 mins.
    You should not use any switching service, as this only applies if your closing the old account, and as you have an OD to service, your old bank would not allow it.

    You simply open the new account, arrange to have your salary etc paid to your new account, cancel old direct debits, and give all your currents payees your new bank details, no need to involve anyone else, simple to do yourself.
    Ex MSE Board Guide.

    More than a third of IVA`s fail....fact.
    Could A Debt Relief Order help you ?
    Never pay a fee for a Debt Management Plan.
    For free non-judgemental debt advice, contact either : Stepchange, National Debtline, or CitizensAdviceBureaux.
  • hmchmc Forumite
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    Thankyou I have no wages it's mostly cash lol
  • OP's idea works if it's a genuine restructuring and not a pathway to more borrowing. I'm sure we've all moved debts onto a 0% card only to end up maxing out the original card/overdraft/whatever and having n+1 high-interest debts to service. I know I have... once or twice (ahem)...

    If you're still adding to your debt each month, then stop and get that under control first - all that'll happen is you'll dip into the overdraft before it's cancelled, or spend on the credit card before it's paid off, and the cycle will start again. Once your spending is at least stable, then the recipe for this is simple:

    1) Original debt is £1500. Card companies normally charge 3% for this kind of cash advance (regardless of what they call it, it's a cash advance). So your debt will become £1545.
    2) CC companies start counting down the second the card is activated, but deduct payment at the end of the month. So 32 months interest free is 31 payments. £1545 / 31 is almost exactly £50/month. If your budget will cope with that, then this is affordable. If you have to do without to make the payments, then it's not (and in fact you've also not stabilised your spending, so go back to step 0 and get that right first).
    3) As soon as card's PIN arrives, put it through a shredder, or burn it. Don't open it. Keep hold of the card for a couple of days until you confirm the balance transfer has completed (and you've registered for online banking etc. if that's not automatic (Halifax, I'm looking at you)). Then shred it or burn it. Destroy it and forget you ever had it.
    4) Set up a DD for £50/month.
    5) As soon as the balance transfer completes, cancel your overdraft facility. If that means switching to a basic bank account, so be it. Anyway, remove the safety net - it's an illusion anyway.

    After 32 months (or 31 pay-days if that's how you track things), the debt is gone. Without the card you can't add to the debt. By not keeping a record of the card's details, you're not tempted to put it into Amazon "just this once". And provided you're disciplined enough to cancel the old cards/overdraft, you've not taken on new borrowing, just changed creditor.

    Anyway, hi, I'm new here ;)
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