Borrowing only a small amount?

TLR_2

Hi,

Thinking of borrowing ~2500 to get a new car and to pay my insurance for next year (Cheaper than financing it over a year direct from the insurer)

Was thinking of getting a 0% credit card, is there a way to withdraw cash for 0% or would I have to buy a car from a dealer if I went this route? Not many private sellers would take payment by CC!

TonyMMM

I think you will find that cash withdrawals are excluded from the 0% rate on most (if not all) credit card deals, and may have a high interest rate with no interest free period. - check the small print of any you are considering.

alibongo42

I took out the Virgin 0% balance transfer credit card to finance a car purchase a few months ago.

If you can't pay the seller with a card, there was a facility to transfer amounts into your bank account at a rate of 3.8% I think. There may have been other small print, but might be worth checking out.

jamesd

The Virgin and other MBNA cards will balance transfer to a current account for a 4% fee. Alternatively you can use a 0% for purchases card and transfer normal spending to it, saving up the money you're not spending until you have the cash saved to buy the car. Then do a balance transfer to clear the 0% for purchases card when that deal expires. The 0% for purchases approach is cheaper but slower.

TLR_2

Ok, but it'd still be cheaper than getting a loan? As long as I pay above the minimum repayments a month, and then transfer the balance to another card after a year?

I'd probably need about £3000 in total, is this realistic with a CC?

jamesd

Yes, it'd be cheaper than a loan and it's entirely realistic so long as your credit record is fair to good or better. How much you get from each card depends on your credit rating and income. Might be doable with one card, might take two or three. The Virgin one is easy to try and they tend to offer relatively high limits. I currently have something around half my annual income on cards at 0%, for stoozing rather then spending.