Can you transfer overdraft balances?

Mjs90

Hi, I am a graduate interested in becoming debt free! Currently I am in my over draft and have a balance transfer card (1 step in the right direction, I know). I'm living in my overdraft and can't seem to get out!! Is it possible to transfer an overdraft to a balance transfer card and is this a sensible thing to do?

Anyone with any advice please let me know!

lika_86

No, although some credit cards will let you do a money transfer to your bank account, sometimes with a 0% interest rate for a while (albeit usually shorter than for balance transfers). My Barclaycard does this. Of course, there's a fee involved.

sourcrates

Mjs90 wrote: »

Hi, I am a graduate interested in becoming debt free! Currently I am in my over draft and have a balance transfer card (1 step in the right direction, I know). I'm living in my overdraft and can't seem to get out!! Is it possible to transfer an overdraft to a balance transfer card and is this a sensible thing to do?

Anyone with any advice please let me know!

Your best bet is to open a new basic bank account, one without a borrowing facility, and use that for your everyday banking.

Then, pay as much as you can afford over to your old overdraught on a monthly basis until it's paid off.

This will learn you to live within your means, whilst also paying off your debt.

binaryuniverse

I think my first question would be are you paying interest on that overdraft?
If you are not. Then there is little point getting it transferred elsewhere as the debt is already as cheap as you are going to get. Just keep chipping away at it.

If you are paying interest then, if your credit card allows it, a 0% money transfer will help you clear the debt (the fee will probably be minuscule compared to the interest you are paying on the overdraft).
However, with this you have to be really careful, and disciplined, else it's really easy to fall in to having 2 big debt problems, rather than the one.

If you can't get a money transfer, then the third option is to get a 0% spending card (the longer the offer, the better). You then pay for all day to day purchases on the card (bar rent/bills other direct debits). Then pay the minimum off on the card, each month. Again, as with the money transfer, this requires discipline and has the same potential pitfalls.

Once you've looked at those options, the next thing you need to address is why you are constantly in your overdraft. Are you doing everything you can to minimise spending? Are you looking at cheaper alternatives to your usual purchases? Scrimp on every single penny you can. Look where every single pound is going. It's easy to think, "Well that's only £2, so it doesn't matter in the grand scheme of things". But it does. All those small transactions add up.
If you have to live on a diet of rice and tomato sauce for a while, then so be it. It's short term pain for long term gain. Plus learning to live frugally pays dividends when you do actually have spare money to hand.

I imagine most, in this section of the forum, have been a similar position in our lives, hence we wouldn't be here. It's not easy to get going on it but, hopefully, a few years from now, you'll look back and be glad you made those changes.