Living in overdraft

skintdaddy79

Hi all,
So this is my second post and so far you have all been very helpful :T
As per my last post I've stupidly built up a credit card debt of which i have had my head in the sand about for too long really. Had a 'lighbulb moment' and am now tackling the debt head on. The debt was just under 12k and have managed to shift this all onto 0% balance transfer cards, split between 3 cards and am now paying set amounts off each month. Unfortunately by doing this it has left me with virtually nothing left at the end of each month. After bills, credit card payments and food i'm left with hardly anything and thus having to dip into my overdraft for day to day each and every month. Just looking for advice really , and maybe some reassurance that i'm not the only one having to do this!
I am married with 2 young kids and my wife is aware of the debt and knows i am paying it off, i just feel bad because i'm literally having to watch each and every penny to be sure i dont go too much overdrawn. Thank you in advance. Any advice is greatly appreciated... :-)

[Deleted User]

You would be better getting a separate credit card and putting your failing spend on that, then clearing in full each month.

Your OD could be withdrawn at any time, which would leave you very exposed to charges and defaults. The more debt you have elsewhere, the more likely it is to be withdrawn.

skintdaddy79

Ok, thanks but what would make the bank withdraw the OD ? My OD is £700.00, obviously i wouldnt want to get anywhere near that, i'd probably be going 2 maybe £300OD tops.

[Deleted User]

Risk.

If they feel you're over-exposed, they won't want to be last in line to get their money back.

Putting on a credit card and clearing in full removes that risk and also avoids charges.

skintdaddy79

But i would probably be using said OD to actually pay for the expenditure on the credit card ??

[Deleted User]

No, you'd be using your income to clear it, just like you're using your income now to reduce your OD each month.

skintdaddy79

Sorry, i may be being a bit thick here, but like i say after everything is paid, food shop, bills ect i'm left with probably about 20 or 30 quid in the black. Any spend after all that is going into my OD. So if i spend on the credit card , i'd be using funds from an Od to pay it off..?

[Deleted User]

No.

Because you'd be using your card for your bills and food shop so you would have lots more left in your account at the end of the month. You use that money to pay off the card.

Mnd

What is being suggested is for example,

All July's day to day spending goes onto the credit card and not use your overdraft.
Then you pay off that amount in full when due therefore reducing your overdraft and moving it onto credit card to give you a breathing space.
What you will be doing effectively is paying your day to day bills a month late.(which is what we do)

However, you will need to be on top of this and make sure you don't use both the credit card and the overdraft

skintdaddy79

Thanks for your replies zx81. I'm just worried about getting another credit card and getting into a mess again with debts... :-(
So your basically saying to use a credit card to pay for bills and food shop and then clear at end of month? On a credit card though i'll be charged interest on it?

MEM62

skintdaddy79 wrote: »

On a credit card though i'll be charged interest on it?

No.

If you clear the balance each month you will not pay interest. You need to listen to the advice that zx81 have given you in addition to getting you head around how CC's and the payment cycles work. This can be used to your advantage.