0% cash with 0% credit card balance transfer

JJef_2

Hi

I've just transferred a balance onto a Virgin credit card and they are offering payments of cash into a current account at 0% for the duration of the balance transfer deal (16 months). I can't help thinking there must be a catch although of course they say there isn't! Does anyone know anything about this offer and if there are any drawbacks? Would appreciate any info on this as am thinking of taking the plunge.

Thanks

somethingcorporate

Hi JJef,

This is quite a good deal. The only catch is a 4% cash advance balance transfer fee (as oppose to the 2.8% normal balance transfer fee).

Over 16 months this is still very competitive!

We recently did this and it is working out well

HTH.

mike5678

My question is, does this affect the 0% rate for the balance transferred to the card? Like it would if I was to spend on the card?

Or is it simply a case of the only way they will make money is from the 4% transfer fee? I could do with this extra cash at a cost of 4%, but not if it is going to upset my current balance on the card at 4%?

Also, at the end of the 0% rate of this cash transfer, does it then have to be paid off or does it just remain as a debt on the credit card, that could then be transferred again if I wished?

Thanks guys

CannyJock

Mike, are you saying you already have a Virgin Money card with a balance on it?

If you've already got a balance then this probably isn't for you. You'd have to clear the balance first for this to work out.

The main catch is that you don't clear the card (repay or shift elsewhere) before the end of the 0% period. They'll throw your interest rate up and milk you for cash. Always check and double-check the exact date the 0% promotion ends and pay it at least a week before this.

Another catch is if you don't set up a direct debit to repay the minimum and miss a payment, they charge you and revoke the 0% offer, charging you interest (although people have reported getting this reinstated if they ask very nicely).

The other catch is that you don't spend on the card once you've done your balance transfer, although you'll get some junkmail encouraging you to . This is a standard trap where your repayments are all allocated against the 0% balance and they charge you interest on your purchases.

If you do it all correctly, don't miss any minimum payments, clear it before the end of the 0% period, then yes, is only the 4% fee on the funds you transfer they'll make.

mike5678

I've just taken out this card and transferred a balance to it. I have set up a direct debit to repay the minimum repayment. I will not use the card for spending at all.

So I can transfer the remaining amount up to the credit limit to my current account at a cost of 4%, without it having any affect on the balance that I have transferred to the card?

CannyJock

So long as your 0% promotion is still current then yes, up to 95% of your credit limit.

You'll effectively have two balances both at 0%, both expiring 16 months after the card was activated (not when the balance was transferred iirc).

Call their CS people and ask them to confirm if the offer is still "current", you've already got the DD in place so should be nice and simple.

mike5678

Thanks, just one more question, concerning the repayment. At the end of the 16 month 0% period, do I have to pay it all back, or can it be transferred to another card if required? I've never done a cash transfer before.

CannyJock

I'd transfer it elsewhere if you can get a workable 0% deal, so long as you're not digging a hole for yourself. Yup, a balance on a card can be moved elsewhere regardless of where it came from. The "source" whether it's a balance transfer, cash advance or purchase determines the interest rate you'll be charged but once it's on the card it's just a balance.