How to get a debt from a flexible loan to a credit card

chaos5678 · 16 April 2006 at 8:37AM

Hi Everyone

I'm hoping someone can tell me if there is a way of moving a balance of £3600 from a Cahoot flexoble loan to a credit card

I have read Martins bit on using a mule and I have done that in the past but the aniversary date for my Egg is Feb

I can't work out if it's worth paying the £50 transfer fee to move it now to Egg
The Cahoot loan is 7.9% I think and I have an IF low life of balance cc ready to move it to, but has to be done in next 6 months (4.9%)

I am fairly desperate to get this moved, it's the last debt that not settled on a cheap life of balance,
Hoping someone is up this lovely Easter morning who can advise

Lewby · 16 April 2006 at 9:00AM

Hi Chaos,

I did this myself recently to take advantage of a lower LOB rate on a card. I haven't got my calculator handy but I worked out what the interest for a year would be on the higher rate, so for you it's £3600 x 7.9%. Then do the same at the lower rate £3600 x 4.9%. If the difference is more than £50 then it may be worth it. It also depends on whether or not you think you'll pay it off in 12 months or not. If it will take longer then obviously you will be benefiting more from the lower LOB in the 2nd year, 3rd year etc.

Just remembered that mobile has calc!

£3600 x 7.9% = £284.40 in interest
£3600 x 4.9% = £176.40 in interest
The difference = £108 which is more than the £50 for the balance transfer.
In year 2 depending on what balance you have left the saving for every £100 would be £3.00.

Hope this helps.

Lewby xx

lynzpower · 16 April 2006 at 9:06AM

My OH is moving his cahoot flexi loan (3k) to a barclaycard, 0% for 11 months I think, details in martins articles few weeks back, no BT fee.

nearlyrich · 16 April 2006 at 9:10AM

BG Note

I will move this to the credit card board as it's a question that the stoozers should be able to advise on.

YorkshireBoy · 16 April 2006 at 9:25AM

chaos5678 wrote:

I can't work out if it's worth paying the £50 transfer fee to move it now to Egg
The Cahoot loan is 7.9% I think and I have an IF low life of balance cc ready to move it to, but has to be done in next 6 months (4.9%)

As an existing Egg Card customer, you should stand a reasonable chance of being accepted for an 'Egg Money' card (provided you've run your account well). I was even accepted without a credit search.

So, once you have the Egg Money up and running, ask IF to transfer a ficticious balance from Egg Money to your LOB card. Call Egg and ask them to BACS transfer the resultant positive balance from Egg Money to your current account and settle the loan from there.

Egg Money does not charge a fee for the BACS transfer, and IF does not charge a BT fee for introductory promotions according to http://www.if.com/info/rates_other_products.asp#LifeOfBalanceCC

I'm sure you don't need reminding NOT to spend on the IF card once you've transferred a balance to it - even though you may be tempted by the 0% on purchases.

EDIT: If you don't have a balance (did you make use of the anniversary offer?) on your Egg Card at the moment, you could always create a positive balance on that card (rather than apply for Egg Money) by BT'ing a ficticious balance to IF as described above.

chaos5678 · 16 April 2006 at 11:38PM

Thanks for that folks!

I knew it would be worth asking here, you're all brilliant

chaos5678 · 18 April 2006 at 12:20AM

I've just done the online application and got myself and OH an egg money card each with enough between us to do the transfer, THANKS AGAIN

YorkshireBoy · 18 April 2006 at 12:34AM

Hi chaos5678,

Glad you've got it sorted.

However, you didn't 'need' two Egg Money accounts - one would have done. Also, you didn't 'need' £3,600 total credit limit - you're going to create a positive balance on the Egg Money card so the credit limit doesn't matter.

Anyway, you can both earn 1% cashback on all your spending now.

Just remember to set up a full payment DD.

How to get a debt from a flexible loan to a credit card

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