Egg Money vs. Overdraft

Steameh

Hi all,

I have an overdraft of £400 with my bank account. My 1 years free period is now up but I don't really want to switch bank accounts. They are charging me £5 a month for the overdraft facility now.

I have applied for and been accepted by Egg Money. They have given me a limit sufficient enough to pay off my overdraft. Egg Money will be charging 7.9% APR on the £400 for my OD. Is this a wise move as the interest charged on the £400 will be less than the £5 my bank is charging.

Cheers

Adam

P.S: I know the sensible option would be to use my £400 savings to pay the OD off but I don't really want to be doing this as I'm booking a holiday within the next 3 weeks and am using the savings for that.

benf90

If it's going to save you money in the long run then go ahead and make the transfer. If you do make the transfer then it may be a wise move to pay more than the minimum amount each month as it could be easy to just forget about it once it's on a card.

Why did you originally apply for the Egg Money card? Was it for the cash back? If so, don't forget if you transferred over the overdraft and didn't clear the card balance in full every month then you'd pay interest on the purchases.

If you decide to do the transfer, its easy enough to do online once you've logged in:

Your money > view next to Egg Money > Egg Money admin > Transfer a balance > Current account / overdraft.

Steameh

benf90 wrote: »

If it's going to save you money in the long run then go ahead and make the transfer. If you do make the transfer then it may be a wise move to pay more than the minimum amount each month as it could be easy to just forget about it once it's on a card.

Why did you originally apply for the Egg Money card? Was it for the cash back? If so, don't forget if you transferred over the overdraft and didn't clear the card balance in full every month then you'd pay interest on the purchases.

If you decide to do the transfer, its easy enough to do online once you've logged in:

Your money > view next to Egg Money > Egg Money admin > Transfer a balance > Current account / overdraft.

If I do make the transfer I was going to set it up so I paid £50 a month until it is clear. I won't be using the Egg Money card for anything else apart from when my 0% runs out on my credit card, i'll use it to transfer the remaining (if any) to the Egg card. (lower interest rate)

There is nothing on the Egg card at the minute as it is a brand new account and I won't be using it to spend on.

Thanks