Advice needed on my idea

superstar_2

Here it goes: I am a student at a local University. I have a student current account which gives me quite a good rate of overdraft. I think it's roughly [SIZE=-1]£2000 pounds or so. It is interest free for 12 months or so as well. I will need to check the details again cos i had forgotten about the details.

My idea is that to withdraw that money, so my current a/c goes into overdraft. I use the money for my websaver savings a/c which pays me 5.4% interest. In simple calculations, thats >[/SIZE][SIZE=-1]£100/year.

At the end of the year, i transfer the money and pay back my overdraft. So, a net gain via the transfer. What i worry, is that will that have any effect on my a/c or status. eg. will that affect my credit score or anything else like that ...??

So, is this a good idea or am i being stupid? Any opinion would be much appreciated. Thanks in adv!
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DawnW

I did this when I changed bank accounts and got an interest free overdraft facility for 12 months. I now do a broadly similar sort of thing with introductory interest free periods on credit cards, as do many other people on here. It works, BUT ONLY if you are extremely organised, read the small print carefully, take great care not to exceed your overdraft limit, and make sure you repay it well within the interest free period to allow time for transfers, cheques to clear etc. If you stick rigidly to the rules, there is no reason why it would adversely affect your credit score.

But please, please don't even consider it if you are not prepared to keep on top of all this!

superstar_2

This is the details:

So what do I get?

• Up to £2,750 interest-free overdraft* for up to 5 years while you are a student and for 1 year after graduation (up to a maximum of 6 years) Typical 0% EAR (variable)

So, pls let me know if i am intepreting this correctly: I get £2,750[up to] overdraft and it is interest free for at least 5 years while i am still at the uni. Lets not talk about the working bit.

superstar_2

DawnW wrote: »

I did this when I changed bank accounts and got an interest free overdraft facility for 12 months. I now do a broadly similar sort of thing with introductory interest free periods on credit cards, as do many other people on here. It works, BUT ONLY if you are extremely organised, read the small print carefully, take great care not to exceed your overdraft limit, and make sure you repay it well within the interest free period to allow time for transfers, cheques to clear etc. If you stick rigidly to the rules, there is no reason why it would adversely affect your credit score.

But please, please don't even consider it if you are not prepared to keep on top of all this!

Thanks mate!

The credit score sort of thing worries me a little. I am quite a very organised person, so i should/would be extra careful with the timeline etc. I can actullay get 2750 quid overdraft for interest free.

More opinions welcomed!

agal

superstar wrote: »

This is the details:

So what do I get?

• Up to £2,750 interest-free overdraft* for up to 5 years while you are a student and for 1 year after graduation (up to a maximum of 6 years) Typical 0% EAR (variable)

So, pls let me know if i am intepreting this correctly: I get £2,750[up to] overdraft and it is interest free for at least 5 years while i am still at the uni. Lets not talk about the working bit.

I think you'll find you don't automatically get the full amount of overdraft.

superstar_2

agal wrote: »

I think you'll find you don't automatically get the full amount of overdraft.

yep, good point. I was offered about 1000 last time which i have cancelled cos i dont use. I manage my a/c very well, so i can drop in again and request for overdraft again sometime this week. Still, something is better than nothing, no?

shays_mum

Icici gives you 6.3% online & make sure you fill in a ir35 form to get the money tax-free! HTH:)

superstar_2

shays_mum wrote: »

Icici gives you 6.3% online & make sure you fill in a ir35 form to get the money tax-free! HTH:)

Thanks shays_mum. Other a/c like you mention does pay a little more, but i already have a web saver a/c, so that will be less hassle. Takes 2 sec to transfer the money.

Your suggestion is good tho, 6.3% is good! my web saver has already been registered as tax-free! :T

More opinion on this would convince me!

Mikeyorks

shays_mum wrote: »

..... fill in a ir35 form to get the money tax-free!

Whoops ..... whatever you do you don't complete one of those. Rhymes reasonably well .... but it's an R85 to receive gross interest.

superstar_2

Any comments on my credit score worries?

david78

You don't have a credit score. Your credit "record" will only improve if you do this successfully. Basically, the more you demonstrate you can handle debt, the better your record.