Overdrafts & 0% Promo Cards in a UK Debt Plan
Overdrafts and 0% promo cards behave differently — and it's easy to get the priority wrong.
On paper, it seems obvious:
Overdrafts have scary 39.9% EAR rates
0% cards literally say "interest free"
So hammer the overdraft, ignore the 0% card. Right?
Not always. Limits, fees, and promo end dates matter as much as headline rates.
This guide explains the trade-offs with two examples showing when each priority makes sense.
This is information only, not regulated debt advice. If you're behind on essentials, speak to a free UK debt charity before using any calculator.
Quick Refresher: APR vs EAR
APR (Annual Percentage Rate) — Used for credit cards and loans. DebtRiot divides by 12 for monthly interest.
EAR (Equivalent Annual Rate) — Used for UK overdrafts. Accounts for compounding. DebtRiot uses the formula (1 + EAR)^(1/12) - 1 for accurate monthly rates.
Both tell you how expensive a debt is. A 39.9% EAR overdraft costs roughly the same as a 39.9% APR card — sometimes more when you factor in limit issues and fees.
DebtRiot handles APR and EAR separately, so you can compare cards, loans, and overdrafts on equal footing.
Example 1: Overdraft Is the Fire to Put Out
Situation:
Overdraft: £1,200 at 39.9% EAR, limit £1,250 (almost maxed)
Credit Card: £3,000 at 19.9% APR, minimum £75
Debt budget: £400/month
Why the overdraft comes first:
The overdraft is:
Nearly at the limit (£50 headroom)
Very expensive (39.9%)
Causing daily stress and potential fees if you go over
Even though the card has a higher balance, most people would:
Pay minimum on the card (£75)
Throw everything else (£325) at the overdraft
Clear the overdraft in ~4 months
Then attack the card
In DebtRiot:
Add the overdraft with EAR selected
Either use Avalanche (overdraft is highest rate) or Custom order to force it first
The overdraft clears quickly, then you roll that payment onto the card
Example 2: The 0% Card Needs Attention First
Situation:
Overdraft: £500 at 39.9% EAR, limit £1,500 (plenty of headroom)
Card A: £3,500 on 0% promo for 9 months, then 29.9% APR
Card B: £2,000 at 18.9% APR
Debt budget: £550/month
Why the 0% card takes priority:
The overdraft is:
Small relative to limit
Not causing immediate stress
Still expensive, but manageable
The promo card is:
Large (£3,500)
About to become very expensive (29.9%)
A ticking time bomb
A reasonable plan:
Pay minimums on everything
Focus extra on Card A while it's still 0%
Get that balance as low as possible before the promo ends
Then clear the overdraft and Card B
In DebtRiot:
Enter Card A with Promo Rate: 0% and Promo Months: 9
Enter the Standard APR: 29.9% for when promo ends
Use Custom order or enable "Prioritise ending promos" in Advanced Options
Watch how the plan shifts focus as the promo window closes
The Questions to Ask Yourself
Instead of "always overdraft first" or "always 0% first," ask:
1. How close am I to the overdraft limit?
Near or over, with fees? → Urgent
Plenty of headroom, no charges? → Less urgent
2. When does my 0% promo end, and what's the rate after?
Big balance jumping to 29.9% in 3 months? → Time bomb
Small balance, gentle standard rate? → Lower priority
3. What are my actual minimums?
High minimums eat into your strategy budget
Check what you're really paying before deciding order
4. Could I switch banks to reduce overdraft pain?
Sometimes a lower-EAR account beats any perfect payoff order
How to Model This in DebtRiot
Add your overdraft with EAR selected (not APR)
Add promo cards with:
Promo Rate (e.g., 0%)
Promo Months remaining (e.g., 9)
Standard APR for when promo ends (e.g., 29.9%)
Compare strategies:
Avalanche — pure interest-rate order
Cash Flow Index — if the overdraft limit is stressing you
Custom — to force a specific order based on your situation
Check "Prioritise ending promos" in Advanced Options if you want the calculator to automatically focus on promos about to expire
Look at the first 6-12 months — not just the final debt-free date. How does each plan feel in the near term?
Model your overdraft and promo cards →
Key Takeaways
High rate doesn't always mean highest priority — limit pressure and promo end dates matter too
Overdrafts near their limit with fees are usually urgent, regardless of other debts
0% promos with large balances need attention before they become 29.9% nightmares
Test both orders in the calculator — the "obvious" choice isn't always right
DebtRiot handles APR and EAR correctly — most US calculators don't
