Which to pay first,Santanders charges are ridiculous.

HopelessGirl

Hi all,I apologise if i'm posting in the wrong place as i wasn't sure how or where to post questions about debt. The situation i've got myself into is a bit of a mess. Basically i have an overdraft with Santander of £500 of which i owe £485 but with unfortunately finding myself out of work last year i now can't seem to pay it off because the charges each month are building up.. I also have a credit card with them which i owe £880. I have only been paying the minimum amount of £15 as its all i could afford but i'm hoping to double i can increase it slightly. This card has just come to its 0% interest free period so its going to be 18.9% and is due to charge me approximately £17 next month. I've only ever owned this one credit card and have no other debts but i tried to apply for the best 0% balance transfer card i could find and i was rejected by both Halifax and Barclays so i feared damaging my credit score further (which is listed as only fair according to Experian.) As a last resort i then checked my eligibility for the Capital one classic card and it was accepted but it only gives 6 months to pay a balance at 0% interest.I'm confused as to what would be best to use the possible new credit card for (either the overdraft or my credit card bill by doing a balance transfer?) I'm very worried and its making me ill because i never ever wanted to have this worry or get a bad credit score. I feel like i'm stuck in a horrible cycle and i can't get out of it..thanks to Santander charging over £70 last month for overdraft charges. I've now cancelled my direct debits with them and opened a basic account elsewhere so that at least they can no longer charge for failed payments. I would be very grateful if someone who is good at comparing interest rates could please advise me on whether to complete my application for the new Capital classic card and what to use it for first? (overdraft or credit card debt) Apologies in advance if i haven't explained too well as i haven't been sleeping because of it all. :sad:

[Deleted User]

You need to overpay whichever is the highest rate. What are the terms of the overdraft?

However, you also need to know that the overdraft could be pulled at any time, so if there is not much in it, you may want to focus on that.

Willing2Learn

Hi HopelessGirl and welcome to the forum

The CapitalOne card is a Balance Transfer card and should not be used for your overdraft. Use this card to clear as much of the existing credit card balance as possible (what is the credit limit on the CapitalOne card?).


Looking forward six months, you'll be able to apply for another six months balance transfer card from either CapitalOne or Aqua. Hopefully, by that time you will have been successful in getting yourself a new job.

It was a good move to open a Basic Account with a different bank.

And good luck with your job hunting.

Are you managing to keep up with payments of your priority bills?

Edit: And don't worry about your credit score. Lenders neither see nor use your credit score. The credit score is for your eyes only.

downhillfast

You cannot directly pay off an overdraft with a normal credit card.
You would either have to get a credit card that allows a MONEY transfer... or you would have to use your normal money to pay off the overdraft and then use the credit card to pay for living costs for the same amount - I would definitely not recommend option 2 as it would be very easy to get used to 'sticking it on the card' and could land you in even more debt.

If the Capital One card doesn't do money transfers (I don't think it will) then you would be better, in this case, to balance transfer the credit card.
Have you checked eligability for any other cards - particularly MBNA or Virgin (these do some cards with money transfer options)? As already said, the overdraft could be withdrawn at any time so if you COULD sort that one out first it would be better.

HopelessGirl

Thank you for your replies guys. Zx81,The overdraft is set at a max of £500 and charges £30 per month as long as i stay within arranged (as far as i understand) but charges extra for exceeding that limit which what happened only by £15 but i don't plan to let that happen again. They also charged £10 for each DD taken out when if was slightly over the limit. To my understanding is that a balance transfer card can be used to pay an overdraft though it depends on which debt is stuck in the worst cycle, so what you are saying is that i should just transfer the balance and try to pay it within 6 months even though the arranged overdraft charges are also expensive Willingtolearn? The limit with the prospective card is £1200 i believe,(haven't yet completed the application in full though.)Thanks again.

Willing2Learn

For paying an overdraft with a credit card, you would need a Money Transfer card. Unfortunately, it is unlikely that you would be eligible for one. I was suggesting that you use the BT card to reduce your credit card monthly interest payments and use the money released to reduce your overdraft.

The £1,200 CapitalOne limit to which you refer, is just a representative example. You may find that once you apply, the actual limit is lower.

HopelessGirl

Ok thank you Downhillfast,i thought most credit cards offered money transfers as i read about them,maybe i've confused the Capitalone card with another. I have checked afew cards on this site which just gives me an approx percentage of the chance i would have of being accepted but they were mostly wrong. Would it not be a better thing if they withdrew the overdraft or would they still charge me interest on it if they withdrew it or i cancelled it myself please?

Nasqueron

Talk to your bank about financial hardship - charges causing more charges, stuck in a cycle. They can do various steps such as freezing future charges or even refunding some recent charges.


DO NOT talk about unfair charges as they will simply refer you to the 2009 court case, emphasis living hand to mouth etc. Do ensure you don't have any "luxury" spending however as this works against a claim for hardship - things like pay TV, expensive mobile phone contracts, eating out and big brand shopping all would indicate you are living beyond your means.

Willing2Learn

If you cancel the overdraft, you would be required to repay the balance owed with immediate effect. What you could do, is ask Santander to freeze overdraft interest and charges on a temporary basis as you are having financial difficulties and are at risk of default. This might give you breathing space to find new employment.

Edit: Oh...Nasqueron beat me to it lol

[Deleted User]

HopelessGirl wrote: »

Would it not be a better thing if they withdrew the overdraft or would they still charge me interest on it if they withdrew it or i cancelled it myself please?

If they withdraw it, you'll be charged interest and will have late payment markers on your credit files.

You want to avoid that scenario.

HopelessGirl

Ok thank you Willingtolearn so even if i used my current credit card to contribute to the overdraft some way would that not be cheaper? (there is still over £600 available to use on it) Sorry i'm confused about which would be best. lol