Too many credit cards? aka "The Credit Card thread"

[tamzzy]

So how can I make money from that exactly?

assuming that you have £3k in cash (the one that you'd have otherwise spent) keep that £3k in a saving account of sort to earn interest
said interest is the money that you'd make over 30 months that you'd otherwise not have, if you had paid that £3k right off the bat

edit: you still have to make the monthly minimum payments on the credit card though

 

[Christmas themed thank]

I don’t get this snoozing stuff.

I’ve just whacked £3k on a 30 month 0% balance transfer card. So how can I make money from that exactly?

I put it in the stock market personally but it's not risk free.

 

[413x]

This stuff is really simple.
I don't get the complication.

Let's keep numbers simple.

Your first card is a 2 year 0pc purchase card with 10k limit and 1pc repay
You build that balance up by spending 10k over a year. Nice holiday, food, Gucci belt etc.
All time putting the money in a 5pc saver.

You get to month 21ish and check for card offers.

Great. There's a 0pc fee 24 month balance transfer.

Transfer the balance keep the 10k in the bank.


Repeat for infinity.

That 10000 becomes 10500 in year one. You're 500 up. Next year you have 11000 (or close) you're 1k up.

 

[danlightbulb]

You build that balance up by spending 10k over a year. Nice holiday, food, Gucci belt etc.

I know you're joking about the belt but the idea here is not to spend on stuff you wouldn't normally, thats the big risk with this is lifestyle creep if you're just dropping things on a cc and knowing you won't pay it back for 2 years. "its ok I'll just spend a bit less next month", and then you don't. There's lots of things I would like to buy (house DIY stuff, new sim racing wheel, PC upgrades) and what stops me now is seeing that savings diminish or that overall level of debt increase.


I just took a look at my available offers. I have a very solid credit history, aside from the mortgage only a bit (£3k) of existing credit card debt (already on a 0% deal), which is already covered by savings (I used a 0% purchase CC to buy some stuff for the house a year to 2 years ago, I had the savings to cover it but wanted to put it on a CC). That offer expires in March so firstly I need to do a BT for that amount.

Going on MSE eligibility checker Im 100% pre-approved for 29 cards in total with the others showing anywhere from 90% change down to 0% chance. However all of these have a fee of between 1% and 3.5% except for the following:
* Santander, 0% BT for 15 months no fee (but there is a £3 per month fixed account charge).
* Virgin money 0% BT for 9 months no fee
* Natwest 0% for 12 or 10 months (unknown until you apply) no fee

So those deals are far away from the ideal 20-24 months duration and this isn't great. I can get another 12 months hopefully with Natwest so that is worth £150 interest on my offset £3k debt. My crypto balance (not particularly ground breaking either) varies by more than this on a daily basis.


Lets look at 0% purchase cards eligibility:

Im 100% pre-approved for 7 cards including:
* MBNA 21 months 0% but only on spending in the first 60 days (this is the issue I was on about before, its obviously still like this for some card issuers).
* Lloyds bank 20 months 0%
* HSBC 0% 20 months
* Virgin money 0% 13 months
* M&S 0% 20 months

Im 0% approval chance for all Barclaycard offers, presumably because I had a Barclaycard already which I only closed down last year as they weren't any good for recurring offers.

There are no low fee money transfer offers, so can't get a quick starting boost.


So in terms of 0% purchase yes I could get 20 months at 0% which lets say for a 10k credit limit (will take me 2 years to fill that at £500 a month spending, the biggest spend I used to have was fuel but with my EV this is now gone so I have far less direct spending now). Ive calculated this will be worth £372 in interest in total over those 20 months, this is including the impact of the min repayment and assuming 5% interest rate).

So £372 in 20 months. For the hassle of making regular transfers, having to keep on top of savings account rates, opening and closing various accounts for the regular savers etc.

Now, if I then can BT that balance after 20 months for another 12 months at 0% fee, then yes there is then another £430 interest available as the debt is already built up by that stage. That's a better figure for just a 12 month period. The issue for me is that end goal is 3 years away, which is a long time. And my mortgage is up in around 2.5 years so keeping that CC debt may not be a good idea.



Im not saying I earn enough to turn down free money but compared to historic methods this is pretty low value.


To be fair I did care a lot more about these sorts of things when I had no savings. A few years back I was really into bank account switching and made about a grand off it. There's a few switches I could do again now (not as many as before) but then I have the hassle of moving direct debits around. Its bordering on 'can i be bothered' for me on this. Im trying to convince myself to do it but failing at the moment.


Also got to remember that its only the recent interest rate rises that have made this viable at all. Prior to 2021 stoozing was completely non viable, you could barely offset the BT fees with earned interest.

 

[413x]

@danlightbulb

For myself I've actually never paid a BT fee.
Sure. Sometimes I have to take a 12 month 0pc option rather than 18-27 but I've moved 10+k of debt for years now using this


I agree you shouldn't spend on tat. Ideal time is pre holiday or something equally as big

For me 10k is worth shifting around at these rates.

500 a year in interest I won't turn my nose up at


I would no longer do it now for 1-2pc savings rates. But at 4-5 it's worth it for that small amount of admin.

 

[danlightbulb]

@danlightbulb

For myself I've actually never paid a BT fee.
Sure. Sometimes I have to take a 12 month 0pc option rather than 18-27 but I've moved 10+k of debt for years now using this


I agree you shouldn't spend on tat. Ideal time is pre holiday or something equally as big

For me 10k is worth shifting around at these rates.

500 a year in interest I won't turn my nose up at

You say you've done this for years, in which case what interest rates were you earning prior to 2021/22? It cant have been much as savings accounts were pathetic for years before. At 1% rates you're talking £100 a year on £10k.

I think £500 a year is worth doing, my point though is it will take me 3 years to accumulate enough to reach that level, then my mortgage is due so I have to pay it all back anyway.

 

[413x]

You say you've done this for years, in which case what interest rates were you earning prior to 2021/22? It cant have been much as savings accounts were pathetic for years before. At 1% rates you're talking £100 a year on £10k.

Yeah I was earning less so every little helped.
It was actually a lower balance then too. But cashback was more common. Even the ones with 20 quid free were worth it

 

[tamzzy]

I know you're joking about the belt but the idea here is not to spend on stuff you wouldn't normally, thats the big risk with this is lifestyle creep if you're just dropping things on a cc and knowing you won't pay it back for 2 years. "its ok I'll just spend a bit less next month", and then you don't. There's lots of things I would like to buy (house DIY stuff, new sim racing wheel, PC upgrades) and what stops me now is seeing that savings diminish or that overall level of debt increase.

Just depends on one's mindset.
I see the CC as a money-making tool and an extension of my bank accounts, not in addition to my bank accounts. So what I wouldn't spend on debit, I wouldn't spend on credit either.

 

[tamzzy]

So £372 in 20 months. For the hassle of making regular transfers, having to keep on top of savings account rates, opening and closing various accounts for the regular savers etc.

When you're at work, what's your hourly rate.
That's what I base "hassle" on.
If the above takes 2 hours to do, then unless you're near £200/h at work...it's still worth the "hassle"

 

[danlightbulb]

When you're at work, what's your hourly rate.
That's what I base "hassle" on.
If the above takes 2 hours to do, then unless you're near £200/h at work...it's still worth the "hassle"

So for me I guess what I look for is whether I notice it or it makes a difference to my life.

As I said above I already have offset £3k which is on a 0% deal, and I will earn about £150 (nominally) from that in interest because the money is sitting in premium bonds. However I don't notice it, its too small. If those bonds were the ones that won me the £1 million prize then of course I'd notice it and would have thought it worth it. So I can certainly see that there is opportunity cost in this. But it is another thing to think about, have on your mind along with everything else in life.

I'd be doing it if it was worth more.



Anyway the banks must be listening...I just recieved this via email from an existing credit card that I have.

Now this is interesting because its 0% fee. I could take the money transfer up to my credit limit for zero cost, then immediately BT the balance out to another 0% card so I don't pay the annual APR.

So this gets me a head start on the lump sum.

I wonder if they would not like this and close down my account?


But the only BT deal I can do this with would be on a 9 month 0% as that's the only no fee deal available. I would have liked a longer BT period than this.

 

[tamzzy]

Just be careful, money transfers hammer your credit score.

 

[danlightbulb]

Just be careful, money transfers hammer your credit score.

Ah because they're seen as cash withdraw?

 

[tamzzy]

Ah because they're seen as cash withdraw?

Yeah

Oh apparently it may not ...it's seen different to a cash withdrawal
(I dare not take the chance though)

Money transfer credit cards

A clever credit card trick can bag you a 0% cash loan into your bank account. Use 0% money transfers to pay off debt & save £1,000s. Money Saving Expert.

www.moneysavingexpert.com

 

[dlockers]

So for me I guess what I look for is whether I notice it or it makes a difference to my life.

As I said above I already have offset £3k which is on a 0% deal, and I will earn about £150 (nominally) from that in interest because the money is sitting in premium bonds. However I don't notice it, its too small. If those bonds were the ones that won me the £1 million prize then of course I'd notice it and would have thought it worth it. So I can certainly see that there is opportunity cost in this. But it is another thing to think about, have on your mind along with everything else in life.

I'd be doing it if it was worth more.



Anyway the banks must be listening...I just recieved this via email from an existing credit card that I have.

Now this is interesting because its 0% fee. I could take the money transfer up to my credit limit for zero cost, then immediately BT the balance out to another 0% card so I don't pay the annual APR.

So this gets me a head start on the lump sum.

I wonder if they would not like this and close down my account?


But the only BT deal I can do this with would be on a 9 month 0% as that's the only no fee deal available. I would have liked a longer BT period than this.

Not sure earning £150 for free isn't worth it to you. It is minimal effort. How much do you get paid per hour?

 

[413x]

It's same as changing bank.

For 150/200 not to be worth half hours work is crazy.

Also. Many jobs can't get overtime so you can't just work more. And it's tax free.

You can literally do this stuff in a lunch break.

 

[danlightbulb]

Not sure earning £150 for free isn't worth it to you. It is minimal effort. How much do you get paid per hour?

For 150/200 not to be worth half hours work is crazy.

Its 40p a day if you annualise it.

I suppose I just want bigger hits than this (but I accept Im being foolish for not taking the small stuff).

(to also be clear, I have done lots of this stuff in the past, but I had bigger incentives to because it was about managing historical debt repayments and getting myself in the black, not trying to make a small bit of interest).

 

[tamzzy]

Its 40p a day if you annualise it.

But you don't spend a year's work for it.
That's a lot of mental gymnastics to justify not doing it lol.

 

[danlightbulb]

Ok I decided to take advantage of the money transfer initially. This will be a much faster head start than building up purchases on a 0% card.

Ive upped my credit limit with the bank that offered me 0% fee on money transfer, and applied for the max. Ive also applied for a new 12 month 0%, no fee BT card (the best offer I had at no fee) and I'll do the balance transfer as soon as the money lands and the account set up. It might cost me a couple days interest while it all sorts itself out.

Then I suppose I have to just dump the cash in my trading 212 cash isa at 4.9%. Need to think about how I take back the money for the min repayment though.

 

[dlockers]

Ok I decided to take advantage of the money transfer initially. This will be a much faster head start than building up purchases on a 0% card.

Ive upped my credit limit with the bank that offered me 0% fee on money transfer, and applied for the max. Ive also applied for a new 12 month 0%, no fee BT card (the best offer I had at no fee) and I'll do the balance transfer as soon as the money lands and the account set up. It might cost me a couple days interest while it all sorts itself out.

Then I suppose I have to just dump the cash in my trading 212 cash isa at 4.9%. Need to think about how I take back the money for the min repayment though.

"OK I've ignored everyone and done my own thing"

p.s. are you sure you can BT a money transfer so quickly? Feels like you've discovered another way of scamming the system if so. I mean why would I ever get a loan if I could just do this?

 

[danlightbulb]

"OK I've ignored everyone and done my own thing"

p.s. are you sure you can BT a money transfer so quickly? Feels like you've discovered another way of scamming the system if so. I mean why would I ever get a loan if I could just do this?

It builds up the pot instantly rather than it taking me 2 years.

I cant see what would stop me? If Halifax let me do a 0% fee money transfer and the balance then sits on my account, and then I BT it away a couple days later to another bank what's to stop me?

if they don't like it they could close my account but I cant see how they could prevent the BT as its just paying off my card debt.

Note though this might just be a one off timing fluke - I cant recall ever seeing this offer on my account before, or with any other bank. There's only a couple of money transfer offers on MSE and they are both 4% fee making them non-viable. This was an existing cardholder offer.