Overdraft vs. savings? What would you do?

[bootsmonkey]

Regularly £3k plus overdrawn, NEVER in the black, my wage disppears into the void. I am OK with this, but wonder whether I should use my ISA rainy day money to pay this off and get back on a level footing. I like having back up though, just in case. DH now working part-time, so I am hoping the extra money will help take the edge off each month! Also have £4K on interest free credit card, so the option is there to move my overdraft onto this basis and pay it off gradually.

What would you do??

Is there a penalty for cashing in your ISA? If so, I would probably just leave it where it is, unless it is not as much as the interest charges you are paying for the overdraught.

Transferring to the interest-free card is a good option - and then cutting up the card.

Totally agree with Ameriscot, except how long is the card interest free? It would take me a long time to pay that much off?

Absolutely - cut up the card - I did this with the other one...... Not sure if there is a penalty for cashing in the ISA - probably. I like the security of having it there though. My mum always had some money squirreled away - called it her running away fund for when it all got too much. Probably take after her!

i would use the interest free credit card to pay off the overdraft.
also the interest you are earning in your savings would be considerably lower than what you pay in Overdaft interest and/or charges.

Most interest free deals are for 9mths, some 12 (the one I have at the mo. is for 18mths, but can't find any more like that) then you swap to another one. Have to keep your eye on it and remeber to swap otherwise you get a nasty interest surprise one month.

With the interest-free credit card, you should set up a standing order or direct debit to automatically pay the monthly minimum charge. If you forget, the penalties can be really big.

I don't want to sound alarmist, but if I were £7000 in debt I think I would consider that the "just in case" scenario had arrived? Of course that's just me. Each to his/her own etc etc.