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Original poster

paying off overdraft with creditcard - how???

9 replies

chancesare · 06/02/2005 10:08

i wondered if anyone has done this and knows how it works.

i have a loan from my bank which i've defaulted on and they want all the money back. I want to use my credit card to do it (from a different company). how do i do that?? do i just call my bank and give them the credit card details or do i need to speak to the credit card company and get them to transfer the funds to the bank???

i hope i'm making sense ...

OP posts:

noddyholder · 06/02/2005 10:10

ring the bank give them your details and thats it \i think Just like paying any other bill over the phone

Potty1 · 06/02/2005 10:26

I think you would have to draw the cash, which means its quite an expensive way of paying - is your credit card on a cheap rate?

StuartC · 06/02/2005 10:55

Don't know whether you've got an overdraft (thread title) or a loan (thread text).

If it's an overdraft, try asking the bank for a personal loan to pay the overdraft off.
If it's a loan (interest rate about 8%) and you are thinking about going to a credit card debt (interest rate about 16%) you may be at the start of a slippery slope (sorry to tell you that). Can't speak about these credit card new-customer deals - but normally the credit cards will treat this as a cash advance and will charge interest from day one. If your own bank won't help (and you must discuss it with them) can you get a loan from another bank to pay this debt? Whatever you do, STOP SPENDING until your debts are paid. I'm not a financial advisor - just old enough to have seen plenty of people in severe money trouble.

misdee · 06/02/2005 10:57

another thing, which isnt alweays a good idea, is to ask to rerfinance the loan withj the bank. i had to do this with one loan, and its easier thwan running up more debts elsewhere.

Snugs · 06/02/2005 12:22

Could be worth doing though if you have a good introductory offer or balance transfer interest rate (I did it with a 0% credit card)

Some credit cards will allow you to pay off personal loans under their balance transfer schemes. You would need to give your credit card company the sort code, account number and outstanding balance of your bank loan.

BUT you must be very strict with yourself with the repayments and ensure it is paid off before the special interest rate ends - they tend to go up drastically.

Branster · 06/02/2005 22:28

how much are we talking about here? is it a loan or an overdraft as interest rates are quite different.
some credit cards allow you to transfer loans & overdrafts as well as balances from other credit cards and soem give you cheques whcih you could you use. otherwise you'd have to do a payment with you card or withdraw cash (for which you will be charged by the credit card).

can you get a personal loan (with your bank or other company) for this purpose?

emsiewill · 06/02/2005 23:07

DON'T USE A CREDIT CARD CHEQUE TO PAY IT OFF.

Sorry to shout, but they are a real rip-off. They charge interest from the minute you write the cheque (rather than from the payment date on your statement). And it's usually a higher rate than the standard one.

I would echo what others have said about being really careful with this. Have you tried talking to your bank? Have you explained why you defaulted? Have you offered to pay them a little every month - even £5?

Have a look here for some ideas on dealing with debt.

Here is more information about getting help with debts. There's a link from that page to the Motley Fool dealing with debt discussion board, which I have heard is really useful.

This is something that is close to my heart, having got myself into trouble before, I hate to see other people going the same way.

jodee · 06/02/2005 23:27

Agree that it can be done, but as has been already said with great caution. I would only do it with a 0% interest card. If you haven't already found it, moneysavingexpert.com is an excellent site, and compares all the CC companies and their rates. You can set up an function with the site which will send you a reminder email when you are nearing the end of the introductory interest rate on your card, so you have plenty of time to transfer the balance to another CC with a good rate.

crunchie · 06/02/2005 23:39

If your credit card will allow you to balance transfer to a bank account (some do and some don't) you maybe OK (egg will let you transfer to a bank account for instance). However is this a 0% credit card, if not GET ONE STRAIGHT AWAY if you can. The other option is to talk to your bank about why you dfaulted. If if was an accident - fogot payment etc, then you might be able to persaude them with up to date payments. If you have no way of payng back the loa, you won't be able to pay back a credit card and the interest will be higher. If this s the case, go back to your ban k and explain. Personally I would suggest you don't use a card, unless you KNOW you will be able to pay it off.

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