Halifax Credit Card Question - PayPal Purchases/transfers

danza · 11 Jun 2012 at 20:45

I'm pretty sure it's best I ask the CC company (Halifax), but as they're closed I thought I'd ask here first.

If I want to make a large purchase using my shiny new card, i.e. buy a car, that's fine if buying from a dealer. However, buying privately may be a little less defined (or at least seems that way to me). If the seller accepts PayPal and I pay via this method, as far as I know this will be classed as a purchase and not a cash advance (trying to maintain and use my intersest free period on purchases).

However, if I transfer the funds to my own PayPal account (need to look into fees first, but this is a potential option), this will set all kinds of alarm bell going won't it, and I'll have a Halifax meat wagon pull up with a SWAT team, the police and a large German lady with rubber gloves and no lube, or, will this count as a purchase as well and all will be well?

Yours slightly confusedly,

danza

The Halk · 11 Jun 2012 at 20:49

To make it even easier for you, financial institutions don't all treat purchases in the same way...

The only way to really tell for sure would be to phone the Halifax and ask them.

danza · 11 Jun 2012 at 20:51

The Halk said:
To make it even easier for you, financial institutions don't all treat purchases in the same way...

The only way to really tell for sure would be to phone the Halifax and ask them.

Yeah, I'd pretty much resigned myself to this, but thought that someone here may have tried the same. Although the PP fees of 2.9% are rather sucky.

There must be a way of setting up a CC payment to a private seller other than PayPal (although I can't imagine it not incurring any fees).

[TW]Fox · 11 Jun 2012 at 20:53

The paypal charges on this are going to be so enormous that its surely not worth doing.

The Halk · 11 Jun 2012 at 20:54

I can't think of any, Danza. The problem is that you need to put it through as a purchase, that means that whoever puts it through for you needs a merchant account, and they'll pay a fee for doing it. They'll want to pass the fee on to you.

A cash advance will not count in the 0% and they'll charge you a transaction fee too, plus a higher rate of interest than normal. Many banks are now trying to charge extra fees where possible, so purchases which could be considered cash - bookies, travel money etc get hit with a cash advance fee. I wouldn't be surprised if Paypal got counted that way by some too.. although it's not happened to me with Barclays, Tesco, MBNA or HSBC, some of which at least I've used on Paypal.

danza · 11 Jun 2012 at 21:03

Looking into it, sending money as a gift i.e. to my wife's PP account from my CC will incur 2.9% fees. So high, yes. But even if I was able to pay directly to a private seller PP account, I'd be looking at the same fees.

I don't think this will work though, it's bound to be complicated and end up with me being stung. I'll call the CC company tomorrow to confirm (if I remember).

The Halk · 11 Jun 2012 at 21:05

You could do it by a cash advance followed by an immediate balance transfer from a competitor. That would come up with about 6% in fees... but I really can't think of a cheaper way of doing it.

The 6% in fees would be partially offset by you having a long 0% to pay it off. Barclays are doing about 20 months at the moment, for example.

danza · 11 Jun 2012 at 21:14

So it's most likely that a straight up CC purchase from a dealer or a PP purchase from a private seller with an appropriately set up account are the only viable ways of doing this.

The only issue that I can see with PP (apart from fees) is the temporary freezing of funds if they suspect money laundering that could scare the beans out of someone (the seller) receiving such a large sum. Well, that and most people are inherently against using PayPal for such things incase things go awry and the buyer throws a wobbler.

[TW]Fox · 11 Jun 2012 at 21:19

Even a dealer is going to cause problems because they will insist on charging you the merchant fee on top of the price of the car - if they even want to accept the card

The Halk · 11 Jun 2012 at 21:22

Even still if they charge 1% or so on top of the card, it's a good way of borrowing the money. In fact for a 5K car it's an invitation to take out a 0% card for 20 months and make a couple of hundred quid in interest.

I've not heard of a dealer accepting a credit card without a charge, unless the person didn't negotiate the price down. In other words if you pay the asking price with a credit card and they don't surcharge you it's because they weren't looking for the asking price

danza · 11 Jun 2012 at 21:30

[TW]Fox;22119581 said:
Even a dealer is going to cause problems because they will insist on charging you the merchant fee on top of the price of the car - if they even want to accept the card

Merchant fees on £3-4K aren't going to be very high, surely? Less than 5% (probably ~3%)?

The Halk said:
Even still if they charge 1% or so on top of the card, it's a good way of borrowing the money. In fact for a 5K car it's an invitation to take out a 0% card for 20 months and make a couple of hundred quid in interest.

I've not heard of a dealer accepting a credit card without a charge, unless the person didn't negotiate the price down. In other words if you pay the asking price with a credit card and they don't surcharge you it's because they weren't looking for the asking price

I'll be looking at whacking the price down as the cars I'm looking at aren't really selling very fast ATM, so it's a little more of a buyer's market than with some cars, mainly due to most people's hate for anything that doesn't burn diesel and do 50+MPG.

I'm not too worried by a few % in fees.

MrKnifey · 11 Jun 2012 at 21:37

Gift to girlfriend then get girlfriend to withdraw cash?

The Halk · 11 Jun 2012 at 21:49

crankbro said:
Gift to girlfriend then get girlfriend to withdraw cash?

I think the OP already said it was subject to a fee.

danza · 11 Jun 2012 at 22:22

I just managed to confirm that it will show as a purchase with Halifax, who were to my surprise open. Now, do I look into transferring the money to my wife to our bank account through PP now (the money will gain some interest/prevent interest accruing on one of our accounts offsetting some of the fee in the interim between now and when I purchase the car), or do I keep it there in the hope that I find a good car at a dealer (less likely). Having access to hard cash usually puts the buyer in a better position.

I think I'll have a read around on PayPal's site and look at transferring the entire credit amount to a place where it'll gain a few points interest whilst it's there.

The Halk · 11 Jun 2012 at 22:25

The interest you manage to offset will be quite minimal.

Assuming you do well and get 3% then per month it's only 1/4 of a percent - which is £2.50 per £1000 per month.

I think hang on and see if you end up with a dealer or not.

Fuzz · 11 Jun 2012 at 22:41

Find a mate who owns a business with a card machine, get him to put it through the machine as a purchase for some product or other, get him to pay you the cash.

You will have to pay the card machines fees on top though or the nice friendly Business mate will be out of pocket.

danza · 11 Jun 2012 at 22:45

The Halk said:
The interest you manage to offset will be quite minimal.

Assuming you do well and get 3% then per month it's only 1/4 of a percent - which is £2.50 per £1000 per month.

I think hang on and see if you end up with a dealer or not.

Well I'll get the limits lifted from my wife's PP account, so at least it'll be there in readiness (lifting limits can take a few days it seems).

Fuzz said:
Find a mate who owns a business with a card machine, get him to put it through the machine as a purchase for some product or other, get him to pay you the cash.

You will have to pay the card machines fees on top though or the nice friendly Business mate will be out of pocket.

I know no such people.