balance transfer and bill payment on credit card

Lashadey

Hi there, I'm a hopeless credit card newbie.
I just signed up for the American Express credit card (so i can get cash back) AND the Tesco clubcard credit card (so i can pay my bills and earn points). I intend to pay all my balances in full at the end of the month. Sometime last year, I bought a tv on credit and the interest rate is 32% - at the time, I didn't think it was as outrageous as I do now, so I intend to pay it off with the tesco credit card. My questions are:

1. If i pay it off with the tesco credit card, would i have to process it as a balance transfer or as a new purchase? As it is, i'd just be giving the credit card details to the company who'll charge the entire balance to my tesco credit card. Tesco is offering a 0% balance transfer for 6 months, so I'm hoping to take advantage of this. Whatever the case, their interest rate is 16.9% - lots better than the initial loan.

2. How do I pay bills with the credit card? I intend to put bills e.g. my rent on the credit card and pay it all in full at the end of the month but the letting agents dont have card facilities. Is there a way this can be done?

I'd be so grateful for your help.

Lasha

td_007

Lashadey wrote: »

1. If i pay it off with the tesco credit card, would i have to process it as a balance transfer or as a new purchase? As it is, i'd just be giving the credit card details to the company who'll charge the entire balance to my tesco credit card. Tesco is offering a 0% balance transfer for 12 months, so I'm hoping to take advantage of this. Whatever the case, their interest rate is 16.9% - lots better than the initial loan.

What is the limit on your Amex? If you can put it all on your Amex you will benefit from the cash back and then you can do a BT from Amex to your Tesco card to take advantage of the 0% rate.

Lashadey wrote: »

2. How do I pay bills with the credit card? I intend to put bills e.g. my rent on the credit card and pay it all in full at the end of the month but the letting agents dont have card facilities. Is there a way this can be done?

You can only if the card payment is accepted. Use Amex where possible to get cashback. If you have a balance on Tesco card, then lock the card in a safe and do not ever use it for purchases!

YorkshireBoy

Are you sure the Tesco card has 12 months on BT's? Think it's only purchases, and has 6 months on BT's.

Often you can't pay credit with credit. Have you asked the credit provider if they'll allow it? Probably need to say who financed the TV to get a better answer on that one.

Why are you planning to pay Tesco off in full each month when it's 0% interest?

Re the rent, even if the letting agents took card payments I'm sure they'd want to make a charge for doing so...probably 2% or so.

td_007

Lashadey wrote: »

1. If i pay it off with the tesco credit card, would i have to process it as a balance transfer or as a new purchase?

Missed this bit - it will classed as a purchase.

Lashadey

@YorkshireBoy - I told them I was going away for a while (I am!) and that I will not have any money to pay it with from my account and all I have is a credit card. I intend to pay tesco off each month because I don't want to have a huge unpayable bill at the end of 12months! Or is there a better way?

@td-007 - if it would be classed as a new purchase, wouldn't I do better putting it on the tesco since it has 0% on purchases for 12months? I havent' received the limit of the amex yet - next week they said cos I filled the form wrongly online and had to complete it over the phone.

Can I pay regular bills e.g. sky, electricity, water etc with a credit card?

Folks, I'm a total newbie to this and I'm just trying to get it right first time.

Thanks for your help!

YorkshireBoy

Lashadey wrote: »

I intend to pay tesco off each month because I don't want to have a huge unpayable bill at the end of 12months! Or is there a better way?

Pay Tesco their 3% each month and put the other 97% in a savings account. At the end of the year raid your savings account for the final balance and what's left, ie the interest, is a little something for your trouble. It's called (slow) stoozing.

You need discipline. Do you have it?

td_007

Lashadey wrote: »

@td-007 - if it would be classed as a new purchase, wouldn't I do better putting it on the tesco since it has 0% on purchases for 12months? I havent' received the limit of the amex yet - next week they said cos I filled the form wrongly online and had to complete it over the phone.

Yes you can put it all on Tesco directly to keep it simple - the idea of going via the Amex route is to get additional cashback. Again, to keep it simple if you do put it all on Tesco it is best not to do any BT on that as well.

Lashadey wrote: »

Can I pay regular bills e.g. sky, electricity, water etc with a credit card?

You need to check with the companies - however be aware that using a credit card could attract some additional fees or charges. It is usually cheapest to pay via monthly direct debit unless there is some particular advantage such as cashback.

Lashadey

@yorkshireboy - I AM disciplined - not very calculated though! I'd go crazy with the math! I think I have to start with practice.
@td_007 - I'll check with the companies... sorry if this is a silly question - can I do monthly direct debit to a credit card? All my bills are currently on monthly direct debit to my account. Meanwhile, I'll check with them.

Thanks!

td_007

Lashadey wrote: »

@td_007 - I'll check with the companies... sorry if this is a silly question - can I do monthly direct debit to a credit card? All my bills are currently on monthly direct debit to my account. Meanwhile, I'll check with them.

A direct debit can be setup only on your bank a/c. You can setup what is called a "Continuous Payment Authority" on you card if the company accepts card payments. However, unlike direct debit which you can cancel yourself, CPA can only be canceled by the company that set it up which in a way leaves you at their mercy and I would not recommend it all.

td_007

td_007 wrote: »

Yes you can put it all on Tesco directly to keep it simple - the idea of going via the Amex route is to get additional cashback. Again, to keep it simple if you do put it all on Tesco it is best not to do any BT on that as well.

Thought I would put a bit more clarity on this. Go via Amex only if the cashback you get outweighs the balance transfer fees that you will pay. For eg. If the amount is £2000, you will get £100 as cashback (@5% in first 3 months and is also the max eligible at 5% rate). Transfering this £1000 to Tesco will cost you £40 (@2% BT fees). Therefore you will £60 in profit!!

Lashadey

Hm Td_007, i thought putting it on tesco would be like a new purchase not a balance transfer?