Paying off overdraft with credit card?

Superhoopza

I've got a similar scenario occuring in July and am also looking at getting a 0% purchases card, whack daily spending on there and use the savings to pay off the overdraft.

In response to a few people:

Jonesmufc - OP hasn't been a student for 4 years so any graduate accounts would have expired by now
Dresden Dave - the OP can clear their overdraft but wants to avoid paying £30 a month interest, the whole point of the topic.
Zx81 - whilst it's no guarantee, I have an 80% likelihood of 0% interest on spending for 25 months with Barclaycard and have more debts than just the overdraft so if everything else with the OP is good then they may well be able to get one.

How's the rest of the credit file OP? If good then I'd recommend a 0% spend card with Barclaycard and have the overdraft clear in maybe 3/4 months.

molerat

Superhoop91 wrote: »

I've got a similar scenario occuring in July and am also looking at getting a 0% purchases card, whack daily spending on there and use the savings to pay off the overdraft.

In response to a few people:

Jonesmufc - OP hasn't been a student for 4 years so any graduate accounts would have expired by now
Dresden Dave - the OP can clear their overdraft but wants to avoid paying £30 a month interest, the whole point of the topic.
Zx81 - whilst it's no guarantee, I have an 80% likelihood of 0% interest on spending for 25 months with Barclaycard and have more debts than just the overdraft so if everything else with the OP is good then they may well be able to get one.

How's the rest of the credit file OP? If good then I'd recommend a 0% spend card with Barclaycard and have the overdraft clear in maybe 3/4 months.

How are they going to manage that if they haven't paid it down in those 4 years ? Yes the £30 reduction in fees would help but they don't seem to have made any inroads into it at all. That is why to me, unless op really has had that lightbulb moment, the 0% spending card is a bad idea.

I currently have an arranged overdraft of £1800 and usually use £1700 of it each month. It is left over from my interest free student overdraft however now I am paying approximately £30 on it each month from interest and monthly charges.

Superhoopza

It gives them extra time for a start. If they can't clear the balance within the 18/25 month promotional period then there's no point.

muz3562

If you do go down the money transfer route and manage to get accepted for a card with a decent offer it goes without saying that you need to be financially disciplined to not end up back in the overdraft and have interest crowing on the credit card as well .

Personally if I was in the situation I would reduce my overdraft to something more manageable like £250 once I had done the money transfer .



After I graduated I was £2000 into my student overdraft . I saved up in blocks of £500 and cleared it £500 at a time to ensure I incurred no interest on it . Every time I paid off £500 I lowered the overdraft limit by £500 until it was £0. I then went several years without an overdraft

desgirl14

Thanks everyone for your replies and advice.

It has only been the last few months that I have found myself in a more stable position financially to save and get myself out of my overdraft.

I!!!8217;m very confident that I should be out of it within the next 18 months however paying the extra £30 a month in the mean time seems like unnecessary obstacles. Hence wanting to transfer the money.

Thanks again everyone for the advice

MallyGirl

Have a good look at the options and your spending behaviour before making any applications.

If you really do spend £1700 a month then how much of that could be done on a 0% purchases card? If it is the majority then you could put everything possible on the 0% purchases card and be out of the overdraft in a couple of months leaving you a 0% balance on a CC to pay off over the length of time they offer you.
The advantages of using 0% purchases card are:
- more of them around
- no fees
- tend to have longer 0% period than money transfer

If most of your spending can't be switched to 0% purchase card then try for a 0% money transfer as it will knock the OD out in one go (if they give you a big enough limit).
Money transfer cards:
- tend to have shorter 0% duration
- charge a transfer fee of typically 3 or 4%
- there are fewer offerings out there

Either way - drop the OD limit right down as soon as you can so you don't creep back into it with a balance on a card that will eventually become 20+% APR.

desgirl14

So update...

I made the decision that Money Transfer is the way to go and made an application with for the Tesco one as the fee for me would be higher fee on MBNA.

As I was making the application it timed out so I had no idea if I was accepted or not. I've just phone them and I've been accepted for a 24 month 0% interest money transfer car (yay!) however the credit limit is only £700!

This may be me being naive but I wasn't expeciting the limit to be that low. There didn't seem to be any information as to what the credit limit was going to be or what I was going to be eligible for - maybe this was because it timed out on me and I missed that information.

£700 is definitely better than none, but I'm not sure what to do about the rest. Can I apply for another money transfer somewhere else? Will it be bad on my credit rating to have 2 and should I wait a while before I do this? Will I be accepted for a second one? How do I know what the credit limit will be on the second one?

Thanks in advance!

molerat

Best to apply for another one NOW before the search from Tesco hits your file. There must be something about your profile that has spooked them a little, I had way over my income in available credit and close to my income in existing credit and T gave me £5.8K - they did turn me down for a 2nd card though.

MallyGirl

I have always found Tesco to be very stingy with their limits (to me). Amex/Barcllaycard and MBNA all gave 4 times what Tesco would let me have.

Take the £700 and make one more application quickly. You will not know the limit until the application completes.