Use overdraft to clear credit card?

[mrsjwright]

Okay, basically i'm in a mess right now financially and I don't really understand the pros and cons of overdrafts and credit cards when compared to one another.

My current account balance is quite low, but in the green, and I have an overdraft facility of �700. I also have a credit card which I owe �350 on, costing me �50 a month.

I obviously want to clear debts a.s.a.p. Would it be best for me to go into my overdraft on my current account to get rid of the credit card balance once and for all? Or should I try to stay out of my overdraft whilst continuing the monthly credit card repayments?

Thanks for any advice you can give me! :)

[cogsy]

pay off the credit card and cut it up you dont pay intrest on your over draft unless you go over the amount what you have agreed with your bank learn by your misstake and dont use the plastic good luck

[Tom Braider]

Hey Cogsy, which bank is it that doesn't charge interest on an overdraft? Mine certainly does, even though it's by arrangement. It's about the same rate as my credit card, too.

[Postdog]

An agreed overdraft is cheaper than a credit card. An unagreed overdraft probably isn't, but I don't know that for sure,

Mind you, I'm a bit confused at why you HAVE to pay �50 a month on such a small credit card balance. I have a similar balance, and it's only through my choice that I pay what I do. If it was down to them, the amount I have to pay is a lot less.

I personally would keep the credit card, reduce the balance as quickly as I could, and then get rid

[LBerry]

Depends on the rate (APR) of your overdraft compared to the credit card. If your overdraft is at a cheaper rate than your credit card, use it to pay of the credit card, if it's the other way round, don't. Also remember to factor in any fees, as some overdrafts charge a monthly fee in addition to the interest.

[Whoever]

Check out:
www.moneysavingexpert.com

and sign up to join their forum.

They have lots of helpful threads on there dealing with debt and credit card problems and you'll probably gets lots of useful advice.

Generally speaking, if the interest rate you would pay on your overdraft is lower than the interest rate you're paying on your credit card it makes sense to use the overdraft to pay off your credit card. But if you're not good at controlling your spending, cut your credit card up to avoid temptation.