CreditCards Blog

Hi there guys and gals.

First tome poster here but I have used all your wonderful posts succesfully many times. Thankyou!

I have a HSBC graduate account with an arranged overdraft of 2500. The first 2000 is interest free (until end of next year) and and the last 500 is not.

I am employed full time but not on the greatest wage, So am always overdrawn. I dont pay much interest on the last 500 but have been overdrawn for years.

I also often end up going over my overdraft, sometimes 2 or 3 times a month accruing a 25 charge each time.

I am currently looking for a new job with better pay. But what I was wandering is could I use a "Super balance transfer" with MBNA for example to pay off this overdraft. Or would I be better opening a new account to pay all my wages into and direct debits out of in order to treat my overdraft almost as a loan to pay back.

The other positive about getting a credit card would be that if I did need to go over my overdraft (I never do it on frivolous things, just food etc) then I could use a little on the interest free credit card and avoiud the 25 cost.

Sometimes I only take 25 out over my overdraft just to eat for a week but I have to pay back double that!

Hope that makes sense, I have never had a credit card before, I think it might help my situation but I've always said I wouldn't get one.

Any help would be greatly appreciated.

THankyou.

Birdy3_uk

If you can do a super balance transfer without cost to you - go ahead and do it.
It might be better though if you just put the odd spending on the credit card at the end of the month rather than go over your overdraft limit and get charged.

However you have to prepare a budget to allow you to repay this the following month or this will snowball and before you know it you will be over your head in debt.

If this would be your first credit card, you have a limited credit history, so from the lender's perspective you're something of an unknown quantity. You probably need to be more concerned about actually getting a credit card, rather than trying to select the best 0% card to shift your overdraft.

Lenders launch these 0% promotions, which are sometimes heavily advertised, to draw in new customers. Often they are flooded with applications and can afford to cherry-pick applicants. They are likely to see your lack of a credit history as too great a risk. If I were you, I'd concentrate on finding a better paid job first.

For tips to improve your chances of credit card acceptance, have a look at the *Credit Rating: how it works and how to improve it guide*, especially Martin's *Manage and Improve your credit score* article ;)

http://www.moneysavingexpert.com/banking/credit-rating-credit-score#improve

Originally Posted by Birdy3_uk
The other positive about getting a credit card would be that if I did need to go over my overdraft (I never do it on frivolous things, just food etc) then I could use a little on the interest free credit card and avoid the 25 cost.

Not a good idea, IMO. This is exactly the trap MBNA calculates some customers will fall into and it's one of the main ways, this lender stands to make money. Those taking up the 0% balance transfer deal, are offered interest-free purchases for just 6 months and then bombarded with advertising aimed at persuading them to spend on the card as well (at their standard rate) which, as some discover the hard way, is variable.

Generally speaking, it's wise to keep your balance transfer(s) and purchases on separate credit cards.

Martin's golden rule: never, EVER spend on a credit card after balance transferring to it! Definitely not money saving ;)

Your first priority must be to learn to budget and to look in detail at your income and spending. paying 25 to go over your OD limit is just throwing money down the drain.

Draw up a comprehensive budget and find out where all your money is actually going : try using this one
http://www.makesenseofcards.com/soacalc.html

look at your income... can you increase your income ..overrtime, parttime job, sell stuff

Although stifting debt to 0% credit cards may seem a good idea, unless you clear the debt within the 0% period you will end up paying very high APRs
Better to tackle the debts head on and don't just accept them as inevitable.
If you want to post up details of your budget I would suggest you go over to the debt freewannabe board... you'll get lots of ideas for cutting down and lots of support too.