Low Interest Rate CC to pay off car loan?

Portia_2

Can anybody see any problems taking out a low interest (0%) credit card to pay off the balance of an existing car loan as long as you ensure you pay the amount off before the 0% rate expires?

frivolous_fay

Bear in mind the following:

- Check that your loan provider will allow you to pay using a credit card.
- Unless you get a card which give you 0% on purchases, you'll have to pay with one card, then transfer to the one with the 0% rate
- If the above two points present problems, then your other option is to make a balance transfer to a 0% card from a card that doesn't have any debt on it. It's best to transfer from an egg or Mint card, as they allow you to transfer the resulting positive balance to your current account... leaving you with money in the bank to use to pay off your loan.

Example:

Shiny Card Co. offer 0% balance transfers. They send you a new card.
You ring up Shiny and ask them to transfer £5k from your egg card, which you haven't been using to spend with.
Egg card ends up with +£5k on it
You then ask egg to transfer the £5k to your bank account.
Bingo! £5k to pay off your loan. Just remember to make the payments to Shiny. And make sure when the 0% deal on the Shiny card expires, you are ready to pay it off, or transfer it again!

Please note that Shiny Card Co. is used for the purposes of the demonstration and is not a real card! ;-)

magentadreamer

I paid off my car loan using a 0% card. The route I took was to transfer money into my current account by using my Egg Money card. I then BT'd from Egg to my 0% card. I was charged a couple of quid in interest by Egg for using Egg Money. NB should you go down that route HBOS group cards don't do BT's from Egg Money - well halifax One doesn't!

YorkshireBoy

magentadreamer wrote:

NB should you go down that route HBOS group cards don't do BT's from Egg Money - well halifax One doesn't!

Hi MD

Sorry to take this a little off-topic, but is this official now? I know 'some' people were having a little difficulty in the early days of Egg Money, but their BT's were eventually going through.

magentadreamer

I tried a couple of days ago with my Halifax Card and got the we do not currently accept transactions from this lender message when I attempted.

YorkshireBoy

magentadreamer wrote:

I tried a couple of days ago with my Halifax Card and got the we do not currently accept transactions from this lender message when I attempted.

You posted this on the stoozing site didn't you? - sorry, my memory's not what it was!

magentadreamer

Lol actually I think it was something about how I created a neg bal on my Egg money just so I'd feel slightly more comfortable in asking for a BT -thankfully I had another 0% card in the waiting.

Bokken_2

Why not keep it as simple as possible and get a credit card that allows Super Balance Transfers from their card ie,MINT,MNBA and A&L all provide credit card cheques with your credit card.Simpily write a cheque to your own bank account and then send that amount to the loan company .There it is paid ,and the debt is now on your credit card.
Have a read up on Martins articles on BT and SBT so you know whats happening with your money.
Also watch out for the transfer fee normally a max of £50 or 2% of the amount moved .If your not sure phone them and double check.
To make life a little easier if you apply for two 0% credit cards you can split the amount of the loan between them if it is a large amount.
just remember to move the card balances at the end of the 0% onto another 0% card to avoid the interest.