Using a 0% MBNA credit card to clear overdraft

rozmister wrote: »

I have a problem with debt and I’m trying to work out the best way to begin clearing it. The most expensive debt I have is a Lloyds overdraft of £2000 which costs me £61 in fees per month. That’s before I start paying it off.

Using the eligibility credit card calculator I found an MBNA card I was eligible for and their pre-approval system said I would be able to have 15 months 0%. When I did the final stage of the application it said 7-10 days for a decision - is this common? What will be the outcome? I haven’t even had an email to confirm my application.

Also I am stupid to then use this credit to pay for everything for a few months allowing my salary to build up in my account clearing the overdraft? I recently got a pay rise and genuinely believe I could clear the card before the 15 months are up. It also seems better to be paying off a debt instead of just covering the charges.

Oh dear, those bank charges are not good. To be honest, it is almost as high as a Vanquis credit card on a £2000 balance.

For the application part, if their pre-approval has provided an offer quote, I can't see the referral having a bad outcome, but it does depend on the final checks conducted through their underwriting team. Some companies will not send correspondence about your application via email until their decision is reached. If you do not hear anything after the 10 days, I would recommend phoning them up to check it out.

If it is a balance transfer card, it cannot be used to pay an overdraft, however if it is for a money transfer into your bank account, this would be possible. If it is a balance transfer card, then perhaps using it to transfer your other debts (assuming they are credit card related) onto it may ease the pressure for that 0% period, allowing you to focus on clearing the overdraft or vice versa. Remember that clearing debt requires sensible budgeting and spending, therefore do not make decisions which could put you in a poorer position than currently.

For the best help and advice on clearing your debt, I recommend heading over to the Debt-Free Wannabe section of the forum.

Should just point out now that MBNA is part of lloyds group so if they share details might not get the limit you want.