Advice on repaying overdraft

Jjw95

Been advised to put this in this thread.

Hi basically my student account is now being moved over to a standard account which means I will incur interest on my overdraft. My over draft is at 2000 and I'm near that limit. A friend suggested I could look at a 0% interest credit card but I'm not sure if the time on either of these would allow me to pay back the overdraft in time.I am also confused with how transferring the balance works is it possible to just transfer part of it so I could least get part of this overdraft interest-free as I pay it back. All advice is welcome as I am massively overwhelmed and just trying to sort my life out as uni did not work out.

bobbiz22

You can get a couple of 0% interest cards but you make sure their balance transfer fee is also 0%!
As some charge a fee for this, so read the small print

You can normally balance transfer however much you want over. Not just the full amount in your bank amount.

bobbiz22

Check the MSE page for credit cards,
moneysavingexpert . com/credit-cards/balance-transfer-credit-cards

There are 0% balance transfer cards, there's a 27 month santander one if you scroll down : )
Just make sure you can afford the monthly repayments.

Hope that helps a little

kidmugsy

I ask from profoundest ignorance: are there really 0% cards that would let one transfer an overdraft? An overdraft, not a balance on another card? Golly.

eskbanker

Ignore the above posts - if you want to pay off an overdraft then you need a money transfer card not a balance transfer card. The latter only covers transfers from one credit card to another, but to get hold of cash to pay off an overdraft that's different, see https://www.moneysavingexpert.com/credit-cards/money-transfers for further details.

Check eligibility at as it's far from a given that you'll get a decent card offer: https://creditcards.moneysavingexpert.com/?money-transfers

However, they're no silver bullet as they just shift debt from one place to another, and ultimately to pay it off you need to earn more or spend less, rather than simply reducing interest costs....

BakingC

You do not need a balance transfer. If you wanted to use a credit card to clear your overdraft you would need a money transfer card which can also be done at 0% but more likely to incur a surcharge of around 3% to do.

My opinion would be to try and get a 0% purchase card and do your normal spending on that card (paying minimum each month) so any spending is reducing the overdraft and going on the CC at 0%. However you still need to pay this off eventually.

How long ago did you graduate? If you still have an overdraft maxed out and you graduated uni long enough ago to have your student / graduate account moved to a standard account what you need to do is increase your income / decrease your spending a moneytransfer is a short term solution as you have just reduced the cost of the debt but it is still debt and if you couldn't pay off the overdraft before will you suddenly be able to pay off the card?

bobbiz22

Ooops sorry - Mis-read your original post! Your wording about credit cards threw me.

I have done both though with my credit card & overdraft, balance & money transfer.
Just make sure you can afford repayments (ignore my balance transfer advice as stated by everyone else)

Westie983

Duplicate thread -
Please stick to one thread about the same thing where you will get the help you need. I have closed the other one, as this one had more replies.

Westie983

binaryuniverse

BakingC wrote: »

You do not need a balance transfer. If you wanted to use a credit card to clear your overdraft you would need a money transfer card which can also be done at 0% but more likely to incur a surcharge of around 3% to do.

My opinion would be to try and get a 0% purchase card and do your normal spending on that card (paying minimum each month) so any spending is reducing the overdraft and going on the CC at 0%. However you still need to pay this off eventually.

If the overdraft is now being charged interest/fees then a money transfer fee will be nothing in comparison to the cost of slowly paying it off, whilst using a 0% purchases card.

Tesco offer a 0% (for 36 months) Money transfer card, with a 3.94% fee. So it'll cost you about £79. But. like I say, peanuts compared to overdraft charges over the time you're paying it off. Then give generous limits too, in my experience.

If you have the ability, you could of course do both: Pay the overdraft off with the money transfer card, and take out a second card with a long 0% on purchases, to help build up a balance.

As ever, credit cards also require discipline. So no frivolous spending. If you can't afford it with your salary, don't buy it. Otherwise you'll be back here, in 2/3 years time with the same problem.

BooJewels

If I can add a secondary consideration - you don't just have to pay off your overdraft balance (especially if you want to do it in one chunk rather than gradually), but also find enough to then live on, to stay in credit.

So, if you're a grand overdrawn and when you're paid, it takes you to 0, you actually need to find 2 grand - one to pay off the overdraft, then another to live off without then re-using your overdraft.

I wanted to pay mine off recently and failed in my initial calculations to address this, until the penny dropped, so you'll need more than just the overdraft balance to get ahead of it.

Dobbibill

Hi Jjw95 - welcome to the forum.

My first question would be are you earning? You say uni didn't work out but not whether you have found a job since.

Without an income you will be very limited to what you will be eligible for.

Treat the overdraft/credit card as a bill - add the cost into your budget every month. If you do move it to a credit card, make a clear plan on how you will pay it off before the promo offer expires.