Best way to raise £4500 - a credit card?

London_Town

I need to raise £4500 and am unsure of the best way to go about it. I had been thinking of a bank loan, which I can get at 7.9% and by rolling it up with the remains of a current loan, I'm only paying about £50 more a month. While this extends the loan by 2 years, it sounds nice and easily affordable.

However, I'm wondering whether I would be better to use credit cards. The current Tesco card does 0% apr for 12 months for purchases, which could be good. My plan would be to make bigger payments to the card then I would a loan and transfer it again before the 12 months expire. Then I'd look to do a balance transfer and take it from there. I appreciate that there are transfer fees, but wondered if people still successfully manage debt this way?

The other concern I have is that inevitably, no card will suggest even a possible credit limit. Therefore, is there really no way I can know whether a card provider would give me a limit of £4500? I say this as of course, once you've applied, your credit file has that foot print. The other card I was considering was the M & S one. Does anyone know whether they would ever give a limit as high as £4500? I'm a home owner, on £22,000 a year with a spotless credit rating. The only debt I have is the remains of a car loan (around £2800 now) which currently costs me £134 a year.

Any advice or constructive comments would be appreciated.

Thanks

CannyJock

London_Town wrote: »

The current Tesco card does 0% apr for 12 months for purchases

It's a good card, but if you need the full £4500 quickly then I'd apply for this after you've sorted out a 0% balance transfer card with SBT capability (Virgin Money with 4% fee springs to mind):

London_Town wrote: »

I appreciate that there are transfer fees, but wondered if people still successfully manage debt this way?

It's still the cheapest way to borrow so long as you stick to the rules and are successful with your application.

London_Town wrote: »

Therefore, is there really no way I can know whether a card provider would give me a limit of £4500?

Nope, only by comparing yourself to other people in identical circumstances .... and tossing a coin

London_Town wrote: »

I'm a home owner, on £22,000 a year with a spotless credit rating. The only debt I have is the remains of a car loan (around £2800 now) which currently costs me £134 a year.

You'd need about £4800 of credit limit to be able to extract £4500 (Virgin Money is 95% of credit limit). Which works out at 22% of your income, which isn't unheard of, certainly not unreasonable to expect with a good credit history and stability in electoral role, address, employment, bank.

I'd prioritise the 0% balance transfer cards, maybe need to apply for more than 1 (say Virgin Money and PO classic). You don't want to apply for more cards than necessary because you want to keep a bit of headroom for BTing the balance onwards at the end of the initial promotion period. I'd also make the minimum repayments during the promotion period while concentrating on piling every spare penny into a high interest savings account.

London_Town

Thanks for your response CannyJock, you've been very helpful.

moneysavexpert1986

London_Town wrote: »

I need to raise £4500 and am unsure of the best way to go about it. I had been thinking of a bank loan, which I can get at 7.9% and by rolling it up with the remains of a current loan, I'm only paying about £50 more a month. While this extends the loan by 2 years, it sounds nice and easily affordable.

However, I'm wondering whether I would be better to use credit cards. The current Tesco card does 0% apr for 12 months for purchases, which could be good. My plan would be to make bigger payments to the card then I would a loan and transfer it again before the 12 months expire. Then I'd look to do a balance transfer and take it from there. I appreciate that there are transfer fees, but wondered if people still successfully manage debt this way?

The other concern I have is that inevitably, no card will suggest even a possible credit limit. Therefore, is there really no way I can know whether a card provider would give me a limit of £4500? I say this as of course, once you've applied, your credit file has that foot print. The other card I was considering was the M & S one. Does anyone know whether they would ever give a limit as high as £4500? I'm a home owner, on £22,000 a year with a spotless credit rating. The only debt I have is the remains of a car loan (around £2800 now) which currently costs me £134 a year.

Any advice or constructive comments would be appreciated.

Thanks

I got the M&S one, got a similar salary, more debt and I don't own my own home - they gave me £4900. You should be fine!

London_Town

Thanks moneysavingexpert1986, that's why I love this community! Your comment is very encouraging.