Pay debt with Credit Card?

aidso

Hi guys,

I have been reading through a lot of the web pages and just wanted to clarify something incase i was misreading it. I am in a position at the minute where a family member has a considerable amount of debt and is having trouble paying it. What I would like to do is apply for a 0% interest Credit card from the likes of Marks and Spencers or Halifax One Card, pay the outstanding debt with this card and then use the 10 months interest free rate to pay the amount back - playing on the fact that the debt company will no longer be charging me interest during this time (as i have paid it all) and the credit card company wont be charging me unless i go over the 10 months. Therefore i have 10 months less pressure to get the debt down.
Is this correct or have I misunderstood something?

Many thanks,
A

davetrousers

So you want to transfer someone else's debt into YOUR name? That's very trusting of you.

aidso

Like i said, its a family member (who doesnt trust family?) and since they have been in this situation for a while they wouldnt benefit from applying for new credit cards or loans because of a bad credit history.

CLAPTON

its not a question of trusting family, from what you say the person has already shown themselves as not being very good with money.

just bear in mind
-it then becomes your debt
-are you able to pay the CC payments if your relative is unable to do so
-if you don't clear the debt within the interest free period and can't get another such card are you comfortable with the repayments then required with presumably very high APR.
-how much is the debt? is it likely you will get a CC limit sufficiently large?
-have you considered how you will 'extract' money from the new CC to pay the debt.

aidso

CLAPTON wrote: »

its not a question of trusting family, from what you say the person has already shown themselves as not being very good with money.

just bear in mind
-it then becomes your debt
-are you able to pay the CC payments if your relative is unable to do so
-if you don't clear the debt within the interest free period and can't get another such card are you comfortable with the repayments then required with presumably very high APR.
-how much is the debt? is it likely you will get a CC limit sufficiently large?
-have you considered how you will 'extract' money form the new CC to pay the debt.

I am able to pay most of the debt right away so would only need about £2000 on the Credit card and from what i have read the limits start around £3000. I would be able to pay this off within the 10 month period.

exel1966

I think you need to possibly rethink your plan.

Limits do not start at around £3000, it could be a lot less than that, but it will depend on your own personal circumstances in relation to current/past credit and your general history etc.

The M&S card gives 6 months at 0% (£60 fee on £3k)
The Halifax card gives 9 months at 0% (£90 fee on £3K)

Neither give 10 months 0% on BT's.

Nice sentiment, but if for whatever reason you found yourself in difficulties with payments just remember that you alone will be legally responsible for all repayments.

lisyloo

Like i said, its a family member (who doesnt trust family?)

Not necessarily a question of trust.

They could dies, get sick, lose their job and be unable to pay you back.
They might have their will set up to not take account of this so you lose out.

Let's suppose they can't pay you back due to sickness.
Will you begrudge it and affect family relationshsips forever?
What if they simply aren't as dilligent at paying it back as you would expect them to be?

Basically you need to understand that this could end up being your debt for a variety of reasons some of which could end up with bad family relationships.

I'm not saying don't do it, but think it through.

I was recently thinking of putting a Large amount of debt onto my mortgage as I can get a better rate and help family memebers.
However I didn't do it because I could conceive of scenrios where I'd be stuck with the debt (death, ill-though out will, sickness, job loss) and sI simply wasn't prepared to be stuck with it even though the scenarios are unlikely.

YorkshireBoy

exel1966 wrote: »

The M&S card gives 6 months at 0% (£60 fee on £3k)
The Halifax card gives 9 months at 0% (£90 fee on £3K)

Neither give 10 months 0% on BT's.

The M&S card will give 10 months 0% (for a 1% fee, which is £30 on £3K) on a quasi BT...in the form of the Sterling travellers cheque loophole.

The OP hasn't yet clarified whether the "debt" is actually on credit cards. Maybe it isn't, and they're under the (false) impression that any kind of "debt" can be settled by any form of credit card?

exel1966

YorkshireBoy wrote: »

The M&S card will give 10 months 0% (for a 1% fee, which is £30 on £3K) on a quasi BT...in the form of the Sterling travellers cheque loophole.

The OP hasn't yet clarified whether the "debt" is actually on credit cards. Maybe it isn't, and they're under the (false) impression that any kind of "debt" can be settled by any form of credit card?

My comments were based on the standard BT rather than cheque loophole. Judging by the OP's thinking and the way his/her post has been written I'm not sure he/she would be aware of this method of obtaining monies.
I didn't want to complicate matters as these things are probably best practiced by those with a thorough knowledge of cards and their workings.

cocktail

aidso wrote: »

Hi guys,

I have been reading through a lot of the web pages and just wanted to clarify something incase i was misreading it. I am in a position at the minute where a family member has a considerable amount of debt and is having trouble paying it. What I would like to do is apply for a 0% interest Credit card from the likes of Marks and Spencers or Halifax One Card, pay the outstanding debt with this card and then use the 10 months interest free rate to pay the amount back - playing on the fact that the debt company will no longer be charging me interest during this time (as i have paid it all) and the credit card company wont be charging me unless i go over the 10 months. Therefore i have 10 months less pressure to get the debt down.
Is this correct or have I misunderstood something?

Many thanks,
A

1. this can potentially be bad for your credit rating.
2. is the debt with a collection agency?? ur credit card company may
only give u interest free for purchases. payments otherwise will be considered as cash advance and will be charged at the relevant rates--not good.

mikey72

Depends what interest you're paying on the current debt, and where it is. Ie on another card or somewhere else. If it's on a card it's easier, if not consider a BT to a current account, as you could with egg money. I'm not sure if any other cards let you now, I'm sure someone can post if they know. If not you'll have to get a cash advance on another card, then BT to pay it off, but you'll pay higher fees with the cash advance. Then if you haven't sorted if out consider a lower interest rate for a life of transfer, or another 0% deal if they're still around then.
Not ideal, and a bad risk if you don't have the money to pay it at the end, but better than debt collectors.