Avoiding Interest/charges on a large purchase

yelp_for_help

Greetings fellow citizens,

I have a dilemma and hope somebody could suggest how I could achieve my aim, of paying no interest/charges for a purchase of a vehicle.

Now, if I wish to buy a car, e.g. anything from 18-24K, I want to be able to juggle this debt between cards in the standard balance transfer way (O% for 6-9 months, then switch cards). But it's kicking off this process that is the problem. That is, some of the car companies do not accept credit card payments, but will only accept debit cards/money from a physical account.

So I have searched around and found most credit card companies do not do balance transfers direct to bank accounts, which is what the problem is. Some do cash advances but charge 2% on the whole transaction and then interest on a daily basis there after. So for e.g., a 10K transfer would incur a £200 charge.

Citi seem to have convenience cheques where you can transfer credit money into a bank account and/or you can direct debit money from the credit card to the bank account however, you are only allowed to transfer 60% of your credit limit.

So can you suggest a way to achieve my aim (Citi is an idea, so maybe another Credit card company that also allows BTs to Bank accounts)? Also, is there any problem in transferring a balance into another card, BEFORE the other card has paid that same sum out?

Some facts: I have an excellent credit rating. I could also give 5k towards the payment, leaving 13-18K remaining to be transferred: I have the following cards:

Barclaycard. (credit limit 10K soon to be 20-30K)
MBNA (C. limit 4,700)
Lloyds TSB (11,300)

I understand I may need two new cards for me to juggle 13-18K (to enjoy 0% for BTs, and I could close the latter 2 of my existing cards) . Any advise would be much appreciated.

Thanks and Regards,
the Help Yelper..

Reaper

Egg is the best card to move money to your bank account. You can also pass other credit card money via Egg to your account.

Read this and this for more info on how to do it.

Martinslovechild

Yelp,

Although a number of cards have started charging a 2% BT fee which is uncapped, MBNA also charge a 2% fee but depending on the version of the T&C's you have, this could be either:-
   i) capped at £35
  ii) capped at £50
 iii) uncapped
 iv) free!!!

Halifax One do completely free BT's, along with Egg.  Best bet is to apply for these 2 cards first as you can route the Halifax cash to your current account via Egg, then immediately BT the entire Egg balance into your current account afterwards.  Egg and Halifax are usually fairly generous with credit limits.

Moving the cash on to other cards later on when the 0% deals run out is where you're likely to start incurring fees as several credit card companies have now started charging these, as you're already well aware.

ashcarrot

personally if you can do the following it would be benefitial (though whether you could get the cards in time is another matter)

If the car place accepts AMEX get a card an purchase on this i'd put the credit limit down as a deposit then pay as much off when you pick up the car on this card and use some other method for the rest.... (you'll get 1% cashback maybe more depending on card)

now use an egg card and payoff the debt from the AMEX (or as much as poss) eggs card balance transfers are free so you can have the card open and dont worry about the balance transfer happening in time...

Then continue to swap debts every 6 or so months (however CC seem to be stopping the 0% offers)


As a bit of a warning....

What you need to ask yourself though is if the credit cards remove their 0% deal or demand their moneyback will you be able to payback the amount or get a loan that would cover the amount and afford the repayments...

yelp_for_help

Thanks for the responses yelp helpers.

I do have a bit of time on my side, so I can apply for the cards, the right ones that is, in time.

I did look up Egg yesterday, and yes, they do do BTs to Bank accounts without charge and looks a very good bet. Their max limit is 15k though, and there's no guarentee that's what they'll offer. So I will look into the Halifax One option as well, and combine the 2 perhaps two to achieve the aim.

I was a bit concerned by the comments:

"(however CC seem to be stopping the 0% offers)

As a bit of a warning....

if the credit cards remove their 0% deal or demand their moneyback "

can they do that? i.e. if I take out one of these 0% interest for 6-9 months, can they suddenly say, 'no we're not doing that anymore'?

Also, on a side note, re: BT money from Card A to Card B before paying out BT/cash advance from Card B: the credit card companies I've spoken to say they do not 'recommend' doing this, e.g. Barclaycard say you cannot touch a credit amount put in for 7 days. But I believe we can do this, and companies just don't want you to do this (the benefit if doing this is for when doing a cash advance say, instead of incurring a high daily interest rate the moment the money arrives, you have already paid off that cash advance off by BTing that amount in from elsewhere). Can the above be confirmed?

Thanks again, may your food digest that more sweetly this evening.

Martinslovechild

I was a bit concerned by the comments:

"(however CC seem to be stopping the 0% offers)

As a bit of a warning....

if the credit cards remove their 0% deal or demand their moneyback "

can they do that? i.e. if I take out one of these 0% interest for 6-9 months, can they suddenly say, 'no we're not doing that anymore'?

I don't think that Ashcarrot is suggesting that the CC company will withdraw an introductory offer once you're in it (unless you start missing payments etc).

I believe that he is referring to the possible demise of 0% BT deals - there's been quite a bit of press this week about the subject. Worst case scenario is that there are no 0% deals available in 12 or 24 months time and you need to move the amount into a loan, so be prepared.

Reaper

can they do that? i.e. if I take out one of these 0% interest for 6-9 months, can they suddenly say, 'no we're not doing that anymore'?

In theory they can as their T&C say they can change their T&C! However in practice they would not suddenly shorten the term if you had already transfered a balance, they would just apply it to new customers. There would be too much bad feeling otherwise and no company wants bad PR.

re: BT money from Card A to Card B before paying out BT/cash advance from Card B: the credit card companies I've spoken to...

You telephoned a credit card company and told them you plan to stooze!!! Stoozing is one of those activities you don't thrust into the spotlight. The companies are aware it happens and don't like it but as long as it doesn't hit their profits too badly they don't try too hard to stop it. We keep a low profile and try not to remind them. Besides you may be breaking the T&C if you are not using it to pay off debts - if you are not then it is hardly a good idea to phone them and point it out.

the benefit if doing this is for when doing a cash advance say, instead of incurring a high daily interest rate the moment the money arrives, you have already paid off that cash advance off by BTing that amount in from elsewhere). Can the above be confirmed?

Never do a Cash Advance. There are always loads of nasty charges associated with it. Always do balance transfers instead.

yelp_for_help

cheers ears... yup, quite right, I shouldn't mention it too much (crediting a CC before paying out from it). I was just checking if they strictly try and stop this, or if it is something we can squeeze through...

Right, that advice was handy peeps. Much obliged.

scream for cream..