Not allowed to pay off car finance with a credit card

tmwild · 20 April 2017 at 12:07PM

I'll be coming to the end of my PCP agreement this September and I decided to put a plan together to settle the finance early. The car is currently worth more than the settlement figure, so I'll lose out by just giving it back at the end of the agreement.

I was planning on using a combination of debit card and credit card (0% on purchases for 30 months) to pay the final settlement but when I called to do that, I was told they cannot accept credit card payments.

What are my options? Is there a way for me to move the credit into my bank account and still benefit from the 0% interest on purchases for 30 months?

StopIt · 20 April 2017 at 12:13PM

You'd need a money transfer card, rather than a balance one.

Paying off debt with credit is generally a no-go for most finance companies.

Or: Pay for day to day spending with the 0% purchase card for as long as you're able to and use the money saved to pay off the PCP, then pay off the CC at 0% before interest is accrued.

tmwild · 20 April 2017 at 12:35PM

StopIt wrote: »

You'd need a money transfer card, rather than a balance one.

Paying off debt with credit is generally a no-go for most finance companies.

Or: Pay for day to day spending with the 0% purchase card for as long as you're able to and use the money saved to pay off the PCP, then pay off the CC at 0% before interest is accrued.

I've just last week applied and been accepted for my 0% purchases card so I assume it's very unlikely a money transfer card would be approved so soon after, especially with the sort of limit I'd need.

I got the card specifically for this purpose! What a pain. Suppose I should have checked but it didn't cross my mind that they wouldn't accept credit card.

EssexHebridean · 20 April 2017 at 12:43PM

Plan B then as suggested - use the purchase card for all your spending and divert the "unspent" money to clearing the finance. The question is, can you claw enough back that way to clear the outstanding balance? Failing that, sit tight for three months and then try applying for the money transfer card - using the MSE credit club to check your eligibility first, of course!

gr1340 · 20 April 2017 at 12:59PM

I have done this before now to get money from a credit card. It cost me £1.99 transaction fee from PayPal but that was all. It was only for a small amount, circa £60 but it allowed me to pay something off early. The credit card company only see it as a purchase so no cash fees or anything like that.

1 - Add credit card to PayPal account, pay a family member or trusted friend the amount you need.
2 - The transaction will show as a purchase and therefore eligible for 0%.
3 - Get family member/friend to pay withdraw the money and pay into your account.

I assume you can still do this as it was only 3 or 4 months ago that I did it.

Farel01 · 20 April 2017 at 3:54PM

gr1340 wrote: »

I have done this before now to get money from a credit card. It cost me £1.99 transaction fee from PayPal but that was all. It was only for a small amount, circa £60 but it allowed me to pay something off early. The credit card company only see it as a purchase so no cash fees or anything like that.

1 - Add credit card to PayPal account, pay a family member or trusted friend the amount you need.
2 - The transaction will show as a purchase and therefore eligible for 0%.
3 - Get family member/friend to pay withdraw the money and pay into your account.

I assume you can still do this as it was only 3 or 4 months ago that I did it.

What credit card company are you with? I have heard that companies are closing down that loophole/have closed it down. Though you could try with a smaller amount first. Also bigger amounts may have more of a fee.

tmwild · 20 April 2017 at 6:06PM

Does anybody know if money transfer cards are likely to give similar limits to purchase credit cards? Am I right in thinking it's too soon to apply or am I being pessimistic?

I'm doing the maths and think I'll struggle to reach the amount I need just by moving my spending to the credit card. Especially as I'll have to pay off the minimum each month and I'm assuming I can't move my direct debits/bill payments over to come off the credit card?

I'd be worried that they'd spot the Paypal transfer and start charging me interest on the £6,000! Finding a genuine purchase of something which is bought and sold very frequently with little to no change in price seems like an option - I just don't know what that purchase would be!

cwal · 20 April 2017 at 8:48PM

Mbna may be a good place to start for a money transfer card. I believe they generally offer slightly higher balances ( from personal experience) however as others have said, try the eligibility tool first as with another recent application in your name you will probably only get one chance to apply for another card so soon.

January2015 · 20 April 2017 at 9:51PM

tmwild wrote: »

I'd be worried that they'd spot the Paypal transfer and start charging me interest on the £6,000! Finding a genuine purchase of something which is bought and sold very frequently with little to no change in price seems like an option - I just don't know what that purchase would be!

I would be wary of considering using Paypal to transfer money from a credit card. A colleague purchased a vehicle from a relative last year. It was £2,800. In order to use a 0% credit card offer they paid the relative through the credit card via Paypal. Paypal put a stop on the payment whilst they investigated money laundering. All the while the payment had left the credit card account but never reached the relative. They sorted it out eventually - and it did take a while. Just beware that if Paypal want to hold your money they are law unto themselves.

Paypal do say on their site if you want to send money or gifts to friends or relatives you can do this. However, when large amounts of money are involved they seem to get twitchy.

StopIt · 21 April 2017 at 8:23AM

January2015 wrote: »

I would be wary of considering using Paypal to transfer money from a credit card. A colleague purchased a vehicle from a relative last year. It was £2,800. In order to use a 0% credit card offer they paid the relative through the credit card via Paypal. Paypal put a stop on the payment whilst they investigated money laundering. All the while the payment had left the credit card account but never reached the relative. They sorted it out eventually - and it did take a while. Just beware that if Paypal want to hold your money they are law unto themselves.

Paypal do say on their site if you want to send money or gifts to friends or relatives you can do this. However, when large amounts of money are involved they seem to get twitchy.

As will any other credit provider. See the threads related to mule cards for people being caught out by money laundering checks. After all, it does look pretty dodgy to suddenly funnel thousands of pounds via this method to seemingly random people!

I certainly wouldn't want to risk having my money held up like this so would discount PayPal but it's certainly the OP's call.

gr1340 · 21 April 2017 at 12:52PM

Farel01 wrote: »

What credit card company are you with? I have heard that companies are closing down that loophole/have closed it down. Though you could try with a smaller amount first. Also bigger amounts may have more of a fee.

The card was with Tesco.

I guess as it was only a small amount it would never get noticed, they probably would have shown some interest and I tried several thousand as a 'gift'.

Probably best not to use this method then.

Not allowed to pay off car finance with a credit card

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