Should I use my new virgin card to pay off my overdraft

class2ldn

Hi guys, recently got accepted for a virgin purchase card for 24 months.
It also has the bonus of a money transfer with a 1.90% charge.
Now I get paid 4 weekly so my money catches itself up so last month I didn't have to pay anything to the mortgage etc so that months money has gone towards paying off part of the overdraft.
Im around 1500 in my overdraft at the moment and I get paid again on the 29th. My available overdraft is 2500.
I've lowered my overdraft down so I am getting out of it and next month even with bills etc il be down to 1k. I'm with santander so currently paying 30 a month in charges but if i pay it off with the card il have to pay more then that per month to the card.
Im also looking at moving to a halifax reward current account and halifax said I could still move but I'd have to sort out paying it back to my current bank before that happens.
I'm thinking at least with that il get the 100 reward and 5 a month subject to their terms etc.
Is it better to just keep paying it off and lowering it each month or get it on the card and cleared so I can move banks quicker?

Thanks

[Deleted User]

Only if you can pay off the £ during the interest free period and NOT run up an O/D with your new bank.
Otherwise you will be back to square one.

class2ldn

Well the only reason I went in my overdraft was to pay off an old mint credit card I had before we got out mortgage. Like I say I could probably get out of it in a couple of months and even with the charges they are less then what I'd have to pay to clear the card before its 0% expires, 24 months I've got on it.

grumbler

class2ldn wrote: »

...I could probably get out of it in a couple of months and even with the charges they are less then what I'd have to pay to clear the card before its 0% expires,...

There are no any charges for clearing the card.

It's not a rocket science: compare the cost of overdraft over two months to 1.9% BT fee. Most likely the overdraft cost is higher.

class2ldn

No i mean the monthly payment on the card, at the moment I have at pay £30 a month for the overdraft, my repayments on the card each month (about £40 for 1k over 24 months) would be higher but I could then transfer and take the halifax reward account with the cashback bonus.
May just do that, at least it's cleared then.
Think you have to do it within 60 days but no interest for 24 months on it

grumbler

class2ldn wrote: »

No i mean the monthly payment on the card, at the moment I have at pay £30 a month for the overdraft, my repayments on the card each month (about £40 for 1k over 24 months)

You are comparing oranges to apples. Unlike repayments, overdraft fees an interest are wasted money.
And if you want to clear the overdraft in two months, the minimum monthly payments are absolutely irrelevant as you will be paying much more than £40 p.m. to clear overdraft.
And if the overdraft is £1500, transfer £1500 only that will cost you ~£30 one-off fee, not the maximum amount possible.

would be higher but I could then transfer and take the halifax reward account with the cashback bonus.

:huh:

class2ldn

What??? Lol
I want to change banks so I can get the monthly reward payments

JimmyTheWig

grumbler wrote: »

You are comparing oranges to apples. Unlike repayments, overdraft fees an interest are wasted money.

But if someone doesn't have the spare funds each month then the minimum repayments are very relevant.

But as you say, the OP here says

class2ldn wrote: »

I could probably get out of it in a couple of months

so it appears that cashflow isn't the issue.


OP, the cheapest thing to do is probably to do the money transfer.
[If you're confident you know what you're doing you could look at Stoozing. But from what you've written so far I suggest you ask lots of questions before you do.]
But if you're going to clear it in a couple of months then the overdraft might not be that much more expensive. Presumably you'll now be at the point where when your wages go in you're out of your overdraft? In which case you won't be charged £1 _every_ day.

class2ldn

Yeah I'm just getting over that point now and I'm reducing my overdraft down each month

class2ldn

Just thought, couldn't I just use my creditcard for everyday spending and let my bank account build up with just the bills coming out of it? That way I won't have a big lump sum on the credit card to worry about paying off. Seeing as my overdraft balance is reducing each month this may help out a fair bit.
What do you think?

SeduLOUs

class2ldn wrote: »

Just thought, couldn't I just use my creditcard for everyday spending and let my bank account build up with just the bills coming out of it? That way I won't have a big lump sum on the credit card to worry about paying off. Seeing as my overdraft balance is reducing each month this may help out a fair bit.
What do you think?

Yes, you can. If you put your ordinary spending on the card instead of spending the money in your bank account then you are effectively transferring the balance gradually without incurring the balance transfer fee.

As you spend though, you will still be building up a balance on the card that will still attract a minimum payment. As the balance on the card increases, so will the minimum payment, so in that sense would be no different to doing the balance transfer.