Pay off credit card or overdraft?

[niamhiepie]

Hi there,


I am getting €700 in the next couple of days and I am wondering what to do with it?

I have 3 options:

1. Pay off my credit card which is currently maxed at €700

2. Pay the €700 towards paying off my overdraft which stands currently at €1000 taking nearly half my wages each month and then reduce the overdraft amount to €300 from when the cheque clears.

3. Place the €700 into my halifax high saver current account

Any advise woud be greatly appreciated

 

[ClubMan]

Certainly not option 3 in my opinion. What interest rate applies to the CC balance and the O/D? Whichever is higher pay the money off that first.

 

[Tadhgin]

Check the A.P.R. (Annual Percentage Rate) on your credit card and on your current account. Pay off whichever of the two has the highest APR. (Most likely the Credit Card). Forget about Halifax for the forseeable - you can't afford it.

And cancel that Credit Cardfor the next twelve months.

 

[ClubMan]

And cancel that Credit Cardfor the next twelve months.

I'm not sure that this is necessary. If the original poster has a credit limit of €700 and has maxed that out it's not exactly disastrous although it obviously depends on their income* and whether or not they are habitually in CC debt.

* On the other hand if a repayments on a €1K loan is taking half the poster's monthly wages then maybe they are low paid and €700 is a significant debt. Perhaps the original poster can clarify if necessary. Regardless of that we are in agreement on the main issue.

 

[niamhiepie]

What I meant when I said that the €1000 overdraft was taking nearly half my wages is that because I am overdrawn by €1k on my current account, that when I get paid I am generally about €1200 in CR rather than my full wages in CR...........

 

[ClubMan]

If you are overdrawn by €1K each month then you need to sort this out and figure out how to live within your means and not on expensive O/D credit!