Paying off credit cards with overdraft? Plus DFW help

skintstudent21

Right Im trying to be quite good with my finances, and have had a bit of money come in clearing my 0% student overdraft.

Outstanding debt still is:

Capital one CC - £500 2.570%
Barclaycard CC - £350 19.9%
Welcome loan - £3000, not sure of percentage, alot!

So what I am thinking is, use my 0% overdraft to pay off both credit cards. so my overdraft will be maxed out. But I can pay that back with what I normally send as minimum payments to credit cards, and wont get any interest on it.

The loan is a !!!!!!, wish I'd never done it, but have it now so, amd thinking of keep chugging along at the monthly payments and add in any extra I can, like when student loan comes? Good or bad idea?

Also just looking at my capital one card I have payment protection insurance on that, it only takes about £2.97 a month, but still seems a waste if I don't need it. Can I get rid of it?

Think I will write to welcome and ask for an exact statement of what is left on the loan, as would really like to get rid of that aswell, as quick as possible as then I will have no debt..Yay!

Think I will do a SOA soon, but need to get ready for work, so will see if I have time when before I go.

Many thanks for the help.

carrliadiere

If it's interest free, it makes sense. Just make sure you don't leave yourself with no available funds, and also make sure you cut up the cards! I cut up my cards recently, and it's quite empowering.

Def. get rid of payment protection, give them a call and you can sort it.

skintstudent21

Is it better to cut up the cards, or just keep them just in case? Although guess I would be tempted to spend on them.

Will it help my credit rating, which is pretty dire to just get rid of them?

meyore

I would get rid of the cards-it defeats the object if you pay them off then run them up again.

I've been cancelling all my cards as I pay them off, I've heard this is good for your credit rating so I'm giving it a go.

Good luck

GeorgeUK

One of the things that banks look at is that amount of available credit you have - as well as income etc.

If you have income of £10,000 but they see you already have £20,000 available to you in credit, they may see you as a bad risk. If you aren't going to use the cards - get rid of them. If you try to get rid of them and they offer you a 0% for x months or a LoB balance transfer, it may be worthwhile accepting the offer. You can always cancel the card later without using it, just check back and we'll tell you if it's to your benefit or not. Hopefully it'll make a dent in the loan amount.

CLAPTON

Before you can really decide the best way forward you need to know

-is the APR for capital one 2.57% or is that a monthly rate?

-you need to find out what the APR of the loan is
-and whether you can overpay each month and if so does it reduce the total interest payable
- the settlement figure for the loan

- how much is the interest free OD limit?

In general you want to keep some of the OD limit free for accidents and emergencies
and then concentrate on the highest APR debt if thats feasible.

carrliadiere

skintstudent21 wrote: »

Is it better to cut up the cards, or just keep them just in case? Although guess I would be tempted to spend on them.

Will it help my credit rating, which is pretty dire to just get rid of them?

No, that's the pitfall! It's always tempting to have a credit card just incase aliens land and demand you buy them various expensive items, but it makes far less sense than managing your money so you have a built in emergencies fund for surprise expenses. The money has to come from somewhere eventually, anyway.

Or if you must, do as I do - I spend everything on my AmEx, then pay it off in full at the end of the month. That way you have a credit card if you need it for something crazy, and you have the ability to manage your spending and keep an eye on your current account, too. I just wish I had never got my first two cards, nothing to show for them now except two big credit card bills... and an XBox 360!

immoral_angeluk

skintstudent21 wrote: »

Is it better to cut up the cards, or just keep them just in case? Although guess I would be tempted to spend on them.

Then you've just answered your own question. If you're tempted to spend on them cut them up, burn them.... do anything which would stop you being tempted!

Will it help my credit rating, which is pretty dire to just get rid of them?

Yes, as along with repayment history they look for how much credit you actually have and whether you're over commited. So having less will help you out.

skintstudent21

Thanks everyone for the suggestions.

How do I find out the capital one APR. On my statement that is what it says on the statement. Oh actually thats purchase interest so probably not the right amount.

My 0% overdraft is upto £800.

I feel I can use it all, as my wages and everything goes into a seperate account.

SOA coming up on seperate post.

GeorgeUK

How do I find out the capital one APR

Easiest way is probably to phone them and ask. At least you'll not be second guessing which rate is applied.

CLAPTON

skintstudent21 wrote: »

Thanks everyone for the suggestions.

How do I find out the capital one APR. On my statement that is what it says on the statement. Oh actually thats purchase interest so probably not the right amount.

My 0% overdraft is upto £800.

I feel I can use it all, as my wages and everything goes into a seperate account.

SOA coming up on seperate post.

The interest rate should be on the bill.... just post the exact wording on the bill about the interest rate