Clearing a creditcard with an Overdraft.

[BigBrand]

Is this a wise thing to do?

I had a large debt on a credit card from years ago. I've currently put the bulk of it £5000 over two credit cards on an interest free basis. I have £650 left on an Credit Card which is costing me around £60 a month in interest on this card.

I have a £150 interest free overdraft, but have already spoken to the bank and they say I can go up to £1200.

I'm not 100% on my overdraft charges, but this is the document:

http://www.lloydstsb.com/media/lloyd...s_brochure.pdf

Can I ask a huge favour and someone to have a nosey in at how much I'm likely to pay and if i'm better to clear the card with an overdraft as the interest is likely to be less.

Thanks all!

[Mule]

You have a credit card with circa 100% APR?!

[pratman]

Is this a wise thing to do?

I had a large debt on a credit card from years ago. I've currently put the bulk of it £5000 over two credit cards on an interest free basis. I have £650 left on an Credit Card which is costing me around £60 a month in interest on this card.

I have a £150 interest free overdraft, but have already spoken to the bank and they say I can go up to £1200.

I'm not 100% on my overdraft charges, but this is the document:

http://www.lloydstsb.com/media/lloyd...s_brochure.pdf

Can I ask a huge favour and someone to have a nosey in at how much I'm likely to pay and if i'm better to clear the card with an overdraft as the interest is likely to be less.

Thanks all!

have you thought about getting another credit card which will be interest free for upto 20 months and then just set up a DD to that card for £35 a month to clear it over a few years or more if you can afford to clear it and get rid of the debt earlier and once that is cleared just close the card facility down? it just means no further charges and you dont need to extend your o/d facility. check out money saving expert to give advice but personally i would say with the level of debt you have get an interest free card for 12-20 months and get the debt gone

[BigBrand]

You have a credit card with circa 100% APR?!

No, sorry I've got my figures wrong, I was putting in the minimum payment which is £60. The interest I paid last month was £17.

Looking at that document, I seem to read it as paying a one off £6 Overdraft use fee per month with around 19% EAR on any balance over £25.

Do you think this is the right thing given I'll be paying circa £50/£60 a month on this card which means it'll take around 10 months, which would be around £170 ish on interest whilst I'm paying this off.

[BigBrand]

have you thought about getting another credit card which will be interest free for upto 20 months and then just set up a DD to that card for £35 a month to clear it over a few years or more if you can afford to clear it and get rid of the debt earlier and once that is cleared just close the card facility down? it just means no further charges and you dont need to extend your o/d facility. check out money saving expert to give advice but personally i would say with the level of debt you have get an interest free card for 12-20 months and get the debt gone

I did think about this, but didn't want to get another credit card, as that would be 4 credit cards, and also thought if I got knocked back on the 4th this'd be more adverse on my credit history than an extended overdraft.

[I Black Belt]

Another card is worth pursuing. I had a similar problem years ago, got a new card offering zero% on balance transfer and so I transferred the debt to that one and cut it up into tiny pieces so I couldn't spend on it.

[hxbro]

Overdrafts tend to be more expensive for small amounts than other credit options, if you do go that route, limit what you need, assuming you get paid into the same account, take into account for part of the month you might not be using it so could work out cheaper than you think.

Can you extend the credit limit on the interest free cards and move the balance to those, you might need to pay a small fee but at least then it would be interest free afterwards ?

Could you borrow the money from a relative or someone who you'll pay back the £60 a month to without interest ?

Could you cut your spending right down for a few months and pay as much into the credit card as possible ?

[BigBrand]

Thanks for that info mate, I'll look into a few options, I can't extend the interest free credit amount as I'm at 90% of the cards currently so they said no when I asked the other week.

I think I will just keep the Credit Card, the interest isn't that great, and if I can pay more now, the interest for the remaining months should be lower as I have less balance. Plus this'll only aid my credit rating making regular payments to more than one credit source.