How much will it cost to be in agreed overdraft limit for 1 day?

mab2000 · 19 November 2009 at 10:11PM

Forgive me if this is simple stuff, I am very unexperienced when it comes to overdrafts and paying interest.

In December I want to pay off my credit card bill (which i do every month) which is due on the 28th December, however I do not get paid until the 24th December. I bank with Natwest and hold this particular card with them also. Because Natwest use faster payments whenever i make a payment, the payment normally shows up on my on-line banking the next day but is dated for the day i made the payment on. Because of christmas though, im not 100% sure that the payment will show up on-line before the 28th December, so i was thinking of using the overdraft facility ive have but not used before to pay the bill on the 23rd so it shows up on the 24th. It is an agreed overdraft facility. What I was wondering was what is it likely to cost of me going £300 ish into my overdraft for 1 day only? I'm assuming the interest rate is the standard 18.8% apr although not 100%. By my guesswork i may be charged pennies if anything at all, although i have very little knowledge with how overdrafts work so its a complete guess.

onlypaddy · 19 November 2009 at 10:34PM

24th as far as I'm aware isn't a bank holiday so trading should be as normal. Obviously 25th is and as the 26th is a Saturday, there should be a retrospective Bank Holiday on the 28th (thats how my company is doing it anyway). So if banks are working you should be able to make it on the 24th as normal - but dont quote me on that, check with natwest.

Either way, in answer to your actual thread post - I calculate at an APR of 18.8% (0.0515% per day) on overdraft of £300 if you were to get charged would cost you the princely sum of about 15p

mab2000 · 20 November 2009 at 7:56PM

Thanks for the useful reply. Thats how i worked it out so im glad someone confirmed it for me. I know that in theory the payment should go through on christmas eve but what i was worried about is that the payment doesn't actually show up until the next day but is dated for the day that you make it. I think as its not going to cost me a lot i may just go for the safe option and pay it with my overdraft a day early, 15p is better than the god knows how much interest i would occur on my credit card if the payment didnt go through on time.

rb10 · 20 November 2009 at 8:01PM

However you do it, make sure you at least pay the minimum amount off your credit card by the due date. (Probably to arrive at the CC company by the 24th, to be on the safe side).

Biggles · 20 November 2009 at 8:39PM

It doesn't matter when it shows up online, the fact is you are paying a NW card from a NW bank account, so any transfer should be instant, regardless of how long it takes to show online.

24 Dec being what it is (ie many banks close at lunchtime on xmas eve) it would be safest to pay it in the morning. But surely your online banking allows you to set up a payment pre-dated, ie to set it up in advance but date it 24 Dec?

mab2000 · 20 November 2009 at 9:13PM

Interesting point rb10, although had planned to do that anyway, and normally make the minimum payment straight after the statement date every month.

My on-line banking does enable to set up a payment in advance, and i had thought about it, but i didn't think it would do anything to ease my doubts about it reaching my account on time. I am 95% sure that the payment will all go through on time because of the situation as you described biggles, but there is still that small doubt in my mind that it won't. Maybe it is worth making the minimum payment when the statement comes out then setting up the rest in advance to come out on the 24th December, then if it doesn't reach the payment due date on time, shall just put it down to experience, and if it does, I would have saved myself a cool 15p ! :money:

Biggles · 21 November 2009 at 9:26AM

If, as I think you are inferring, you pay in full every month, just set up a DD, then you know it will come out on the right day. If you set it up now, it'll be in operation by the Dec payment.

mab2000 · 21 November 2009 at 10:00PM

Biggles wrote: »

If, as I think you are inferring, you pay in full every month, just set up a DD, then you know it will come out on the right day. If you set it up now, it'll be in operation by the Dec payment.

I do pay in full every month. Thing is though, I won't have the money to pay it until the 24th, on the back of my most recent statement Natwest say that a direct debit will be collected 10 days after the statement date which will be nearly 2 weeks before the 24th December, unless i have mis-understood something there?

Biggles · 21 November 2009 at 11:10PM

mab2000 wrote: »

I do pay in full every month. Thing is though, I won't have the money to pay it until the 24th, on the back of my most recent statement Natwest say that a direct debit will be collected 10 days after the statement date which will be nearly 2 weeks before the 24th December, unless i have mis-understood something there?

I don't have a NatWest card but none of the several that I do have collect before the 'due date' on the statement which, in your case, would seem to be 28 Dec. Maybe someone with experience of the NatWest card will comment.

mab2000 · 23 December 2009 at 9:48AM

In the end, I decided to use my overdraft facility today to pay my card bill, however paid £100 early on in month so only using £200 overdraft for 1 day. As i hasd put stuff on the card this month, i thought it would be silly risking paying much more interest on the card for the sake of pennies. But thanks for all the advice.

How much will it cost to be in agreed overdraft limit for 1 day?

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