What would you do?

yoshiyella

Hi All,

I have an overdraft with RBS - I am currently £1400 in to the overdraft.

I have a credit card with Aqua - credit limit is £1250 and I owe £1150.

I have got a bonus of £1500 - which one would you pay off?

Thanks for any advice and if you need to ask more questions please do ask

binaryuniverse

The one that is costing the most in interest.

worried_jim

Surely it's obvious? The most expensive.

yoshiyella

They are costing me roughly the same.

binaryuniverse

Or, another avenue.

Can you get a balance transfer card, and turn the Aqua card debt in to 0%?
Or perhaps try a Nationwide Flexdirect account, which could give you 0% overdraft (for 12 months) to pay off the RBS one?

If you can do either of these, I would then pay off the one that still costs.

Geoff1963

Is your monthly income at least several 100 ?
Do you have a lot a payments each month which can be on a card ?
Is the card 0 % if settled each month ?
If the numbers work out :
1. Pay off the card
2. Next month, use the card for payments.
Now you are paying the card at the end of each month, so hardly use the overdraft, and the card is 0 % APR.

The two dangers are :
If you pay off the card, the issuer might drop your limit
An overdraft is repayable on demand

Thrugelmir

Overdraft first. Then the card.

With the overdraft cleared learn to budget and use your money wisely. With the money saved from not having an overdraft. Start to pay down the card. Stop using the card and wean yourself off using credit.