paying for a car using a credit card?

Pete.g

I'm thinking of getting a new car and not wanting to get a loan for 8-10k was wondering about the possibility of getting a 0% credit card and putting it on that then just keep shifting the debt when the 0% period is about to end.

Has anyone actually done this and can anyone think of any reason not to? And will the car issuer actually give a credit limit of 10k?

Thanks,

Pete.

lisyloo

Hi Pete,

A few things

1) Your dealer may well not accept credit cards (because of costs) so you might need an SBT card. This is where you borrow the money at 0% rather than make a purchase on the card.
2) There are usually transfer fees of around 3% involved. That's still good compared with a loan but you should be aware of it.
3) You need to get a £10K limit (or more). It's certainly possible, but depends on your credit rating. When I've done this before I've taken out 2 or 3 cards between me and my husband to make up the amount.
4) You are assuming you can shift the debt. If 0% deals don't continue then you need a contingency plan. This shouldn't be a problem if your credit rating is OK, because you can always get a loan (assuming still in employment) but you should be aware that there is no guarantee of being able to shift to another deal.
5) You must be meticulous about paying minimum payments on time. Miss one payment and you could screw up the entire 0% deal.
6) NEVER NEVER do any purchases on a card you've balance transferred. Any payments will usually apply to the 0% loan and not the purchase, so you'll pay interest on your purchase until the whole lot is cleared. Keep your spending on a seperate card.

But apart from that, it's certainly possible and yes I have done it before for a much larger amount, albeit with several cards and 2 people (I think it was 3 cards in total, but about £18K).

zzzLazyDaisy

Yes you can pay for a car by credit card, I did last year.

BUT a lot of dealers won't accept credit cards because of the costs.

exel1966

A credit limit of £10K is nothing unusual, but it will depend on your personal circumstances and credit history.

You will probably be charged an additional 1.75-3.00% by the dealer for making the purchase with a card so you need to factor in that additional fee (£140-£300).

There are other ways to about it where you can avoid the fee and pay cash (from the card/s), but that will depend on your current credit card holding and possibly getting two or more cards.

Pete.g

Wow thanks for the info I'm definatly interested at doing this now.

What exactly is an SBT card and how does this work?

Thanks,

Pete.

NickX

Pete.g wrote: »

What exactly is an SBT card and how does this work?

SBT (Super Balance Transfer) refers to a transfer of debt from a Bank Account rather than another Credit Card. This means a transfer of funds from the Credit Card to your Bank Account. Once safely in your Bank Account you can use these funds as you see fit, pay off other debts, invest in Emerging Aisa or buy a car.

Only a few rather special cards allow this facility. These include Egg, Egg Money, Post Office Card and any card from the MBNA stable (including Virgin, Alliance & Leicester, Sony and MBNA themselves).

In addition MINT periodically issue Credit Card cheques that can be paid into a Bank Account at Balance Transfer Rates. However this is the least satisfactory option because the cheques cannot necessarily be requested so, unless they are already in your possession, you don't know precisely when they are going to drop through the letterbox.

Another option is to ask the dealer to accept a card with 0% on purchases. They may well do so if you pay their "merchant fee" which can be up to 3%. Bear in mind that most Balance Transfers incur a fee of similar magnitude.

lisyloo

I suggest you try the site
https://www.stoozing.com

Which has tables with all the deals on offer.

Pete.g

Right I have spoken to the A&L who I've got an outstaning car loan with at the minute. I owe 6k on that. They have said I cannot pay the debt off with a credit card only bank transfer or cheque.

If I apply for a Virgin card and transfer say 8k into my bank account will I be charged for that? does it count as spending on the card?

Thanks you all for the advice.

I have played the credit card game for a while now but not with this sort of money. I dont want to screw up.

Pete.

Any

Pete.g wrote: »

Right I have spoken to the A&L who I've got an outstaning car loan with at the minute. I owe 6k on that. They have said I cannot pay the debt off with a credit card only bank transfer or cheque.

If I apply for a Virgin card and transfer say 8k into my bank account will I be charged for that? does it count as spending on the card?

Thanks you all for the advice.

I have played the credit card game for a while now but not with this sort of money. I dont want to screw up.

Pete.

HI Pete,
I have the one from MBNA - which is from the same family as NickX pointed out before.
I applied over the internet for the c/card and it asked me if I want to do BT. I didn't do that on the internet, as it didn't say "what bank account shall we transfer the money to;) " so I wasn't sure whether I could do it through there. So I waited for my card to arrive and when it did - in about 5 days - I had to call in and activate it. While I was on the phone to activate it, I told the bloke "I would like to transfer a cash into my current account on the 0% deal you have on offer. How much can you give me?" Because there is of course 3% fee just like when you do BT. And he said "Yes madam, 4.5k, would you like to give me your bank account details?" (he was very polite, don't get called "madam" very offten:p ). So I gave him the details. This all was on Friday afternoon and the Thursday after the funds were in my bank account. Pretty smooth.

NickX

Pete.g wrote: »

If I apply for a Virgin card and transfer say 8k into my bank account will I be charged for that? does it count as spending on the card?

Yes Virgin will allow a transfer to your Bank Account, but there is no guarantee of what limit you will get so £8k may not necessarily be possible.

They allow you to transfer up to 95% of your Credit Limit and charge a fee of 2.98%. It does not count as a Purchase, but as a Balance Transfer.

Hope this helps.

Pete.g

Hi,

I've just applied and been accepted for a Virgin card and it's given me a 9.5k credit limit.

Thanks for all the help,

Pete.