Dilema!!!

user66

Hi, i'm new to the forum but glad i joined as it looks packed with info. My question is this, i have an overdraft of £400 which i don't realy use and i only took it out to get me out of a little money problem, i now earn a decent wage and would like to pay it off but i want to save aswell i have a britainia mini cash isa that i would like to put money into every month, which one would be the best cause of action, overdraft, savings, both?



Thanks

lolarentt

user66 wrote: »

Hi, i'm new to the forum but glad i joined as it looks packed with info. My question is this, i have an overdraft of £400 which i don't realy use and i only took it out to get me out of a little money problem, i now earn a decent wage and would like to pay it off but i want to save aswell i have a britainia mini cash isa that i would like to put money into every month, which one would be the best cause of action, overdraft, savings, both?
Thanks

Do you know what the overdraft facility is costing you?

Thomas_Crown

No contest! Pay off the overdraft & then start to put money into your mini cash ISA each month. The interest payable on the overdraft is going to be more than you will earn on your ISA account.

Welcome to the forum!

rarrarrar

Plus the fact that you have had an overdraft and paid it off looks good on your credit references.

user66

Thanks people, i think i might save and pay some overdraft of each month, so maybe save £100 and pay £100 off overdraft every month,



Thanks for the super quick replies!!!

Aegis

If the overdraft has a higher percentage charge than your savings account interest rate AFTER TAX, then pay off the overdraft in full as soon as possible. If the overdraft rate is lower than your savings account interest rate after tax, then save the money and pay off the overdraft as and when it's convenient, as long as you're not worried about the minor effect on your credit rating that this might have.

If you prefer to pay it off anyway, then do so

influence

rarrarrar wrote: »

Plus the fact that you have had an overdraft and paid it off looks good on your credit references.

Does it really affect your credit reference? If so, will that make a stoozing practice an unwise move?

Aegis

influence wrote: »

Does it really affect your credit reference? If so, will that make a stoozing practice an unwise move?

Most of the guides I've read advise you to avoid stoozing for 6 months prior to any important credit checks, like mortgages, etc.