Settling my overdraft

fluff_pebble

Hi,

Im not sure if this is the ideal section to post this in, but i didnt think it really fitted under the category of loans and wasnt sure if it should go in debt free wannabe's! I have two queries really...

1/ At the moment i hold two current accounts. I have recently switched from HSBC to A&L (the one that comes with 0% overdraft for a year, and you gain interest on money paid in)
I have now completely stopped using my HSBC account but there is a £2,000 overdraft on there, and at the moment i cant afford to make any payments in to that account to start settling it off and they are charging me something like 18% interest meaning the amount owed it just going up and up, so even when i can make small payments they only cover the interest being charged anyway and im making no progress!

What i was considering doing is getting a credit card that offers 0% on balance transfers and moving my overdraft on to this?? Does moving an overdraft count as a balance transfer, or would i have to use a credit card to pay the money into my HSBC account and then pay the credit card off??

I should be able to start making some payments within a few months as i am in the process of moving jobs and will then be earning sufficiently more which will leave me with extra money for a monthly payment.

Basically i want to know what the cheapest way is for me to pay off the overdraft?

2/ I have also printed out all of old my bank statements showing charges that i can reclaim and there is about £900 worth, so hopefully should i get some of that back it should help to settle some of the debt.

All of my statements are online so i have been able to go through every month and print them off, but once i got back to around 2005/2006 there were no fees/charges shown on my account, even though i know that i was having a hard time with money over this period and was getting charged around £100 every couple of months.
Has anyone else had this experience of banks seemingly hiding fees and charges? Surely its not legal?!


Thanks, Kelly.

ShelfStacker_3

1) You can use an MBNA issued card like Virgin to transfer a balance from your current account at 0%. Apply for the card and when you get it through ask to do a balance transfer from your overdraft.

2) The banks aren't dealing with claims for charges right now, but you should still put a claim in. If you click "Banking/Saving" at the top there, you'll find that Martin's written a step by step guide.

HTH

YorkshireBoy

If you can't afford to make any payments into HSBC (£25-30 per month debit interest at the moment?), where is the money going to come from to pay the credit card provider (for Virgin, £60 in the month, and £25 per month thereafter)?

I would expect HSBC to call in the overdraft (and ultimately pass onto collections, thereby damaging your credit file) if you don't pay any money into the account. Alternatively, they may insist you take a managed loan with them.

If you're able to get a Virgin card, will you pay more than the minimum?...or will you finish up with a large part of the debt remaining (£1,650) after 15 months because you've only ever paid £25 per month? Are you disciplined enough to manage both overdraft and credit card debt, or will you rack up more?

Wouldn't A&L match your HSBC overdraft...or at least give you 'something' at 0%?

fluff_pebble

Thanks,

I did put in my original post that I am in the process of moving jobs at the moment to a job with a significantly higher wage, so once I have that amount coming in every month I will be able to start making payments.
I have read articles about avoiding paying only the minimum per month as it keeps you in debt, i would like to pay it all off asap but obviously without paying 18% interest on it!

I haven't asked A&L about matching my overdraft, they have just given me an automatic one of £250.00, and i dont want to have any bigger overdraft on my new account as its too much of a temptation for me and i tend to see it as having more money that i really do!

Should i transfer my overdraft to a card i would close my hsbc account immediatly to avoid the temptation of spending the overdraft all over again, and would certainly not spend on the credit card!

Do you know how long the virgin / mbna cards stay at 0% interest for? I would like budget to pay off as much of the debt as i can afford whilst its at 0% on that card, and then should there be any amount outstanding transfer to a second 0% card whilst i settle anything remaining.

This is what i had in mind anyway?!

fluff_pebble

Also would it be better to go with mbna direct or virgin?

YorkshireBoy

MBNA is 13 months, with a 2.90% BT fee.

Virgin is 15 months, with a 2.98% BT fee.

Both have 'contractual' £25 minimum payments (don't fall into the trap) from month 2 onwards.

fluff_pebble

I think realistically i would like to pay £100 per month off, if i can stretch to a bit more i should be able to settle it within the 15 months & cancel the card.

Thanks for your help guys!