Worth paying by 0% credit card?

cupid_s

Hi,
I wasn't sure where to post this but I hope someone can help me.

I've just been accepted for a 0% for 12 months on purchases credit card as has my husband.

Between us we have just enough limit to pay for our holiday balance which is due in a couple of weeks. We have all the money for the holiday saved in a savings account paying 5% at the moment but I think this might go down soon, and we pay tax on our interest (our ISA allowances are full).

The holiday company charges 1.89% on credit card payments but nothing on debit card payments. So I want to know if I'm better paying the £160 credit card fee upfront and keeping the money in the bank, or if I should just pay cash?

anna42hmr

i have done this, yes you do have a credit card fee, however you are covered by the credit card company if the holiday company goes bust if you put £100 or more on credit card

i have also bought a holiday on 0% instead of removing money from savings, however have locked the card away so i dont use it and have divided the amount on the card by the remaining months at 0% and am paying a fixed amount each month

that way i know the card will be cleared by the time the deal ends, and i can still earn interest on my savings (whilst i have the chance as i have a feeling the savings interests will soon start dropping, even with the card fee for using a credit card instead of debit, i am still better off

cupid_s

anna42hmr wrote: »

i have done this, yes you do have a credit card fee, however you are covered by the credit card company if the holiday company goes bust if you put £100 or more on credit card

I hadn't even though of that and that's a really good point
Thanks

NickX

cupid_s wrote: »

The holiday company charges 1.89% on credit card payments but nothing on debit card payments. So I want to know if I'm better paying the £160 credit card fee upfront and keeping the money in the bank, or if I should just pay cash?

Well the 1.89% fee is quite good actually (some charge more lie 2.5-3%).

Also you will make more than 1.89% on your savings over the course of 12 months.

Personally I would go the Credit Card route and you will benefit from Section 75 cover under the Consumer Credit Act.