Should I use my Credit card, or overdraw my account?

Question

OK I forgot about my car insurance payment this month and I didnt budget for it. it is 250 dollars.

So, what should I do?

should I put the payment on my credit card?

Or should i let the auto-withdrawal take it out of my account and that would mean I would have a negative balance?

Answer 1

I would use the credit card. If you over draw the account, you be hit with an OD fee, which can range from $15-34. Just pay the card back asap.

Answer 2

Charge it! It would be just like using cash, as long as you pay off the balance within the same billing cycle. For one, a bank does not always allow automatic withdrawals to go through. Technically they can refuse to pay it and still charge you a fee, just for the attempt as well as your insurance company charging you a fee. If they do put you in the negative, you can still incur multiple charges. A charge for that item, a charge for any other item that posts to your account while you are overdrawn, and..depending on the bank, a daily charge for having a negative balance.

By using your card, you have placed the responsibility on yourself. You control if you pay anything (interest or fees) not the bank.

Answer 3

Use the credit card this time. Overdrawing an account is bad bad bad.

Answer 4

It depends:

Will you be able to pay off your credit card, or will this charge have to stay on your credit card for a few months?

If you can pay off your balance, then charge it to your credit card: it may also give you some extra time (up to a month depending on where you are in your billing cycle when you charge it) to get the cash to pay it back.

If you won't be able to pay it off, you need to see how much it will cost you to overdraw your account, versus how much it will cost you in interest if you charge it but cannot pay. For example, if overdrawing your account will cost you a 35$ fee, but having the charge on your card for two months will cost you 25$, then you're better off charging it. Keep in mind however, that after 30 days, a missed payment on your credit card goes to the credit agencies, and your credit rating will be impacted negatively.

You might also want to take out a bit from your account, and put the rest on your card: that will lower the amount you will have to put on your card, and avoid any overdraft fees.

Good Luck!

Answer 5

hate to say it but "charge it" you don't want a negative in your account..bad news

Answer 6

a credit card is free financing as long as you pay it off next month, the overdraft charges from the bank will be costly