hypothetical credit card financing question

B@Th*nG · 1 Apr 2011 at 09:50

Hi guys,

I had a thought on the way to work this morning. Would it be a terrible idea to get one (or more) 12 months interest free credit credit cards to make a purchase of a roughly 2-3k car and pay it off in a year?

B@

Morba · 1 Apr 2011 at 09:53

if you actively manage the account so that you dont pay any additional fees and dont go over the 0% interest period then I dont see the issue personally.

Django x2 · 1 Apr 2011 at 09:58

April 1st, I see what you did there

In all seriousness though, no. I do this for many large purchases such as flights, etc

B@Th*nG · 1 Apr 2011 at 10:02

am i right in thinking it would basically be a completely interest free loan?

B@

ahenners · 1 Apr 2011 at 10:27

It would be basically an interest free loan if you paid it off fully before the interest free period ended

cuke2u · 1 Apr 2011 at 10:29

Hi, isn't 0% only on balance transfer deals, and, I heard from my bank, if you keep opening, or even applying, for credit cards it could affect your credit rating as well.

wonder_lander · 1 Apr 2011 at 10:35

Also watch out for dealers who usually charge a % for payments made by credit card

Will Gill · 1 Apr 2011 at 10:39

chriscatt said:
Hi, isn't 0% only on balance transfer deals, and, I heard from my bank, if you keep opening, or even applying, for credit cards it could affect your credit rating as well.

depends on the card, a lot offer interest free on first purchases for a month or whatever

I think the bit about affecting your credit rating is wrong, I balance transfer my cards all the time and my rating is golden. I think if you continually apply for cards and get declined that could earn you bad marks but apart from that I can't (and don't) see an issue

ahenners · 1 Apr 2011 at 10:54

chriscatt said:
Hi, isn't 0% only on balance transfer deals, and, I heard from my bank, if you keep opening, or even applying, for credit cards it could affect your credit rating as well.

Many credit cards with these 0% promotions offer the choice of 0% balance transfer or 0% purchases but not both. Obviously if you plan on making purchases then you would choose a card for 0% purchases.

Will Gill said:
depends on the card, a lot offer interest free on first purchases for a month or whatever

I think the bit about affecting your credit rating is wrong, I balance transfer my cards all the time and my rating is golden. I think if you continually apply for cards and get declined that could earn you bad marks but apart from that I can't (and don't) see an issue

Yep you are right, its only if you get declined and keep applying that it could have a negative effect on your credit rating. The more declines you have in a short period of time will make other lenders more cautious, thus more likely to decline

[TW]Fox · 1 Apr 2011 at 12:10

The problem with this is:

a) Dealers will surcharge you
b) It means buying from a dealer, which for a sub £3-4k car means paying over the odds for something no better, if not worse, than the same thing from a private seller.

londonbairn · 1 Apr 2011 at 12:26

An alternative is to find a credit card with 0% balance transfer to your bank account, though you will have to pay a handling fee of usually 2.9%, if you want funds to do privately (and avoid dealer mark up / CC fee which I am sure will be a lot more than 2.9%)

EddScott · 1 Apr 2011 at 12:27

Although it wouldn't be completely without charge - could you take the cash advance into your bank account from the card (You used to be able to have cards that wouldn't charge you the cash rate)

Then do a balance transfer - assuming the 1st card cash advance wouldn't have a 0% period?

Can you pay of unsecured loans with a credit card? Take out the loan for £3K then pay it off with the credit card. If the card provider saw it as a "purchase" you might get in on 0%.

I went for 0% for 6 months on our kitchen - thinking it would be good for me to get it shot ASAP we now have a lovely kitchen but living on bread and butter until August

B@Th*nG · 1 Apr 2011 at 12:42

[TW]Fox;18805388 said:
The problem with this is:

a) Dealers will surcharge you
b) It means buying from a dealer, which for a sub £3-4k car means paying over the odds for something no better, if not worse, than the same thing from a private seller.

ye, i think you'd have to wrangle it so you get the money but buy privately. Something like Eddscott has suggested

B@

Will Gill · 1 Apr 2011 at 13:24

shove 3k on your overdraft, get the cash, buy the car, transfer the balance to an mbna platinum thingy, pay it off before they raise the interest rate to 44% after the first year.

job done

Simon · 1 Apr 2011 at 17:23

Play do a 1.5%fee 0% credit card that allows BT to a bank account.

Django x2 · 3 Apr 2011 at 18:57

Simon said:
Play do a 1.5%fee 0% credit card that allows BT to a bank account.

This is an MBNA card but I can't see the details about the bank transfer. Can you clarify??

Simon · 3 Apr 2011 at 20:57

Lucero said:
This is an MBNA card but I can't see the details about the bank transfer. Can you clarify??

I did one about 3 months ago, got a £5k limit.

From the FAQs on the website:
Q. How do I transfer a balance?
A. The easiest and quickest way to do a balance transfer is to complete the request as part of the application process. You can also transfer a balance once you have registered with our online banking facility 24 hours a day or alternatively you can call us.
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Q. What is a money Transfer?
A. You can transfer money from your credit card straight into your current account. This money could then be used for large purchases such as a new car or home improvements where payment with a credit card may not be possible.