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  • FIRST POST
    • MSE Helen Saxon
    • By MSE Helen Saxon 22nd Jul 14, 1:45 PM
    • 75Posts
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    MSE Helen Saxon
    Cut Overdraft Costs
    • #1
    • 22nd Jul 14, 1:45 PM
    Cut Overdraft Costs 22nd Jul 14 at 1:45 PM
    Hi!

    This is the discussion thread for the



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    Thanks folks,
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  • anniem07
    • #2
    • 24th Aug 15, 6:55 PM
    • #2
    • 24th Aug 15, 6:55 PM
    Not sure if this is the right forum but hope you can help. Firstly I freely admit so far I have not been good with money. I am trying to get better but need your help. I have a credit card debt of 4k which I pay the minimum plus £50 per month. I also have an overdraft of £1950. Both are maxed but was mostly able to keep to the minimum payments. (The OD goes in and out )

    In April, due to a restructure my income dropped approx £500 per month. I have not yet figured out a way to absorb this. The major impact has been on my overdraft as I have consistently gone over.I have attempted to minimise this using my meagre savings. I recently received my annual charges statement and have paid the bank £600 over the past year.

    I got a letter today offering to increase my OD £2950. On calling they suggested a consolidation loan stating currently my credit card payments are 27% And my OD is 17.9%.

    They say they can offer a loan as at little as 3%. Even if it is as high 10% would it make sense to go for the loan?
    • stclair
    • By stclair 24th Aug 15, 6:59 PM
    • 6,521 Posts
    • 3,459 Thanks
    stclair
    • #3
    • 24th Aug 15, 6:59 PM
    • #3
    • 24th Aug 15, 6:59 PM
    It might be worth getting a credit card that will allow you to transfer cash to your bank account interest free for a period of time. I understand virgin and mbna offer this facility.
    Im an ex employee RBS Group
    However Any Opinion Given On MSE Is Strictly My Own
    • colsten
    • By colsten 24th Aug 15, 7:08 PM
    • 10,294 Posts
    • 9,480 Thanks
    colsten
    • #4
    • 24th Aug 15, 7:08 PM
    • #4
    • 24th Aug 15, 7:08 PM
    Paying less interest on your debts means your charges will be lower, which should help you with getting out of debt.

    If you post your SOA on http://forums.moneysavingexpert.com/forumdisplay.php?f=76, there will be a lot of people who can give useful advice.
    • enthusiasticsaver
    • By enthusiasticsaver 24th Aug 15, 8:49 PM
    • 8,462 Posts
    • 19,532 Thanks
    enthusiasticsaver
    • #5
    • 24th Aug 15, 8:49 PM
    • #5
    • 24th Aug 15, 8:49 PM
    I am not usually a fan of consolidation loans as the temptation for people who are struggling is to take the loan and then continue to overspend thereby accruing more debt.


    In your case though the interest rate you are paying on both your od and your cc is quite high. Is 3% the actual apr or is it a flat 3%% added to the loan at the beginning? You need to read the terms and conditions as sometimes the deals they offer have catches.


    Even if you were able to get a 0% credit card to repay both your debts there would be a fee so if the actual rate is 3% that is worth considering but you must address the disparity between your income and expenses and do not borrow anything else until the consolidation loan is repaid.
    Early retired in December 2017

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
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