Credit Card To Pay Off Overdraft

Nakatomi · 15 November 2017 at 12:13AM

Can you use a credit card to pay off your overdraft so much a month to lower the fees, I am with Lloyd's and I have a £800 overdraft which after so many days I am using once my rent bill payments have been taken out. But my daily fees are £1.12-£1.13 each and I have found out that they do not take it out at the right time, it's supposed to be after midnight or between that and 4am but some days on my statement don't show anything. Then I will get 2 fees taken out on one day and one fee transaction will say it was for the missing date, all in it's £33 a month for me unlike £15 I used to get charged, I just got a credit card from Lloyds 0% for 29 months and I was wondering if could be used to pay it off but I am not sure if the fees each month on that would be higher.

I want to get rid of my overdraft completely along with some small debts I still have and this credit card will help me as I only want to use it on small purchases like shopping for food etc.

YorkshireBoy · 15 November 2017 at 12:22AM

You won't be able to use the credit card directly - you'd need a money transfer* (not a balance transfer) card for that.

But what you can do is spend your way out of your overdraft by putting all essential spend on the Lloyds card and paying just the 1% minimum payment, thereby artificially building your current account balance up.

I presume because you're looking to restructure the debt that earning more and/or spending less aren't options?

* eg MBNA, Virgin, etc.

Nakatomi · 15 November 2017 at 12:24AM

Can you explain on what you mean "Spend you way out of my overdraft please"

I would like to get my overdraft off completely so I can save on fees and not be in all the time and also pay off other small debts I have built up so I can save what I pay each month on them like my Argos Card that's currently £300 in debt on it.

YorkshireBoy · 15 November 2017 at 12:32AM

Nakatomi wrote: »

Can you explain on what you mean "Spend you way out of my overdraft please"

If you spend £200 a month on essentials (eg fuel and groceries), then the minimum payment is 1%, eg £2. The other £198 stays in your current account. After 4 months you don't have an overdraft any more...but you have £800 of credit card debt at 0%, and just over 2 years left to clear it.

Figures for illustration purposes only...you may find the Lloyds card has a £5 or £25 per month minimum if 1% is less than this.

Dobbibill · 15 November 2017 at 7:43AM

Most credit cards don't allow a BT from an Argos storecard.

A MT card would put funds into your current account to move both debts onto the card.
Here's an eligibility checker for MT cards - be mindful it's only a guide and actual applications may differ from the results.
https://creditcards.moneysavingexpert.com/?money-transfers&_ga=2.238301956.501770669.1507840078-1037682649.1480869123

YorkshireBoy has given you a good option if you already have a promo offer on a purchases card.

You will have 3 daily fees debit at the same time on your Lloyds account if it's a weekend as they will collect Sat, Sun & Mondays fees at the same time with the relevant date for each amount.

If none of the above are suitable, consider posting a SOA on the DFW board for hints and tips on where savings can be made in your budget to free up funds to clear your overdraft ASAP, the less overdraft - the lower the daily fees.

Kim_13 · 15 November 2017 at 1:20PM

As others have highlighted, you'll need a Money Transfer card unless you're willing to use the workaround suggested by YorkshireBoy.

This article will give you a round up of the options available: https://www.moneysavingexpert.com/loans/cut-loan-overdraft-costs

anto164 · 15 November 2017 at 3:47PM

Surely you can switch current accounts to one which will give you a decent interest free overdraft, however, i doubt there are many around that will give that level of interest free OD.

Kim_13 · 15 November 2017 at 5:30PM

anto164 wrote: »

Surely you can switch current accounts to one which will give you a decent interest free overdraft, however, i doubt there are many around that will give that level of interest free OD.

First Direct and Nationwide FlexDirect are the usual go to accounts in this situation, though as you say acceptance and a sufficient overdraft are not guaranteed. This article has a section on the best accounts for an overdraft: https://www.moneysavingexpert.com/banking/compare-best-bank-accounts#overdrawn

First Direct/HSBC are known to be picky as to who they accept, so would be unlikely if the poster can't get Lloyds to offer them a way to restructure the debt.

OP, have you called Lloyds? The majority of posters with the Lloyds overdraft problem have reported being offered half price for 3 months, so 1p per day per £14 instead of 1p per £7. This is at least something to give you longer to work on clearing/moving the overdraft.

chesky · 15 November 2017 at 6:17PM

Totally agree with Kim, or you could try actually going into a branch and discussing it with someone there.

Nakatomi · 15 November 2017 at 10:19PM

So I was thinking as YorkshireBoy said we spend about £200 on shopping e.g food etc we don't have a car so no fuel costs instead of paying it in cash we would use the credit card for that and then use the cash to get the overdraft down.

Below is the card I got

It's the very first one the Lloyds Bank Platinum Card 29 months 0% APR (I can't place a link but if you go to lloyds website it's the very first card under ALL CARDS

Can I do the above with this card, even if I cut my fees down it would be great, I will pop into a branch Saturday morning and speak to someone about maybe slashing the fees down for 3 months see if they can do that for me as well.

YorkshireBoy · 15 November 2017 at 10:25PM

Nakatomi wrote: »

Can I do the above with this card

I'd already checked out the card particulars prior to making the original suggestion in my post above.

Credit Card To Pay Off Overdraft

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