So confused please help !!!

Paulasmith91x

I have a credit card and an overdraft and want to pay them both off by consolidating ! Been looking about but everything is so confusing 😔 Was looking at balance transfer but then came across money transfer .. Can anyone explain the difference please ? I completed the elegibilty calculator for both and the money transfer is not looking good at 30% chance !! Anyone got any advice on good cheap and low interest ways of consolidating this debt ?
Thanks
Paula x

ChrisJ1988

A money transfer is where they transfer money directly into your bank account, you then owe the money on the credit card. It usually comes with a fee slightly higher than a balance tranfer. With a balance transfer you basically use a new credit card to pay off the debt of an old credit card, the idea is to replace the debt on a card with a high interest rate to a card with a lower, or no interest rate.

Some people have said that you can do a balance trasfer to a credit card over the amount you owe then get the extra refunded into your bank account. So for example you owe £1000 on a card with a standard rate of 18% You get a new balance transfer card with a limit of £2000 then do a balance transfer of £2000. You would then effective be in debit on your old credit card then you can ask the credit card company to refund the extra £1000 into your bank killing two birds with 1 stone. I have heard that some companies will refund the money back to where it came from so might not work.

All of this helps in the short term but you need to look at why you got into your overdraft in the first place and make a change otherwise you just dely and compound the issue leading to bigger problems further down the line. If you know you will be able to sort your problems out in the slightly longer IE getting a pay rise or finished paying off a loan then spending on a credit card is a great way to bridge the gap between now and then.

Hope this helps some.

CLAPTON

Paulasmith91x wrote: »

I have a credit card and an overdraft and want to pay them both off by consolidating ! Been looking about but everything is so confusing 😔 Was looking at balance transfer but then came across money transfer .. Can anyone explain the difference please ? I completed the elegibilty calculator for both and the money transfer is not looking good at 30% chance !! Anyone got any advice on good cheap and low interest ways of consolidating this debt ?
Thanks
Paula x

what are the balances on the CC and OD?
what APR or fees are you paying on the debts?
how much do you owe?
are you still overspending each month or are your debts reducing?
how much are the debts reducing each month approximately?

grumbler

ChrisJ1988 wrote: »

Some people have said that you can do a balance trasfer to a credit card over the amount you owe then get the extra refunded into your bank account.

It's some cards, not just some people. Definitely not something to confuse/mislead a newbie with.

grumbler

Paulasmith91x wrote: »

I have a credit card and an overdraft and want to pay them both off by consolidating !

"Consolidation" on it's own is a delusion.
It doesn't solve any problems or helps unless the new debt is cheaper.
If you move the debt to a cheaper provider, it doesn't necessarily have to be one provider, i.e. "consolidation".

What you really want is to transfer the debt to a lower rate, preferably 0%, and to use this opportunity to pay it off faster.

dresdendave

Paulasmith91x wrote: »

I have a credit card and an overdraft and want to pay them both off by consolidating ! Been looking about but everything is so confusing 😔 Was looking at balance transfer but then came across money transfer .. Can anyone explain the difference please ? I completed the elegibilty calculator for both and the money transfer is not looking good at 30% chance !! Anyone got any advice on good cheap and low interest ways of consolidating this debt ?
Thanks
Paula x

As others have alluded to, focus on repaying your debts, rather than obsessing over consolidation. All that does is move the debt(s) to a different lender, they haven't gone away.


Post info about the size of the debts and OD fees, CC APR and people can advise on how to prioritise your repayments.


However, the key is to increase your repayments, either by earning more or spending less or a mixture of both. Use the extra funds you generate to repay more.