Loan or cashback on credit card then switch?

macawac

Hello,

We are looking to obtain £1,000 for our son for a deposit and rent in advance on a flat.

I was wondering if instead of a loan we could obtain a cash advance from our credit card and then switch to an interest free for 15 months card??

Is this possible or plain madness???

Regards, Karen

YorkshireBoy

macawac wrote: »

Is this possible or plain madness???

Yes, and (quite possibly) yes.

You'll incur circa 6% in fees, and a little interest...how does this stack up in comparison with a loan?

You may not get the 2nd card, and therefore get hit with circa 27.9% APR interest...that's well over £200 interest over a year.

macawac

Hello Yorkshire boy,

Thank you for your prompt reply.

Possibly a game of russian roulette then??

I haven't actually looked at the figures yet - just had a thought, signed up to the forum and asked the question!! (I have looked at this website many times and love listening to Martin's advice on the radio on the rare occasions when I am at home).

Karen.

CLAPTON

how long to pay the money off?

assuming you have a good credit history
you could consider a MBNA CC with a 0% BT offer as these allow you to BT to your currrent a/c

YorkshireBoy

The Virgin Money card will pay cash into your current account at 0% for 16 months, and charges a 4% fee.

Please note this is NOT a cash advance, or made via cash advance methods, but a balance transfer from a current account. Virgin call it a 'money transfer' and it's best requested with a call centre operative when you have received the card.

mab2000

You may also receive credit card cheques from the virgin card at 0% for 16 with a slightly lower fee (2.98%) which you could either write to yourself and pay into your current account or use one of these cheques to pay the landlord directly. Slightly cheaper bit slower way of doing it.

macawac

Hello Clapton,

Again thank you for the prompt reply.

We have a very good credit history (as far as we are aware!!).

I think we balance transfered from MBNA last Feb to Virgin and so not too sure if we can go back so soon???

Hadn't thought of this way of doing it though. As said before, I haven't really looked at any figures yet - on first thinking I thought it sounded like a good idea - but am well aware that sometimes these can be the worst!!

Will do some proper research on facts and figures.

PS. Is Clapton anything to do with Eric??

Karen.

macawac

Hello Mab 2000,

We do get credit card cheques from Virgin, however I have never looked at the terms of them and look at them with suspicion - ie. straight into the shredder. Have I let interest free borrowing go into the bin?? :eek:

I thought these were like a cash advance - in other words loads of interest and you have blown your interest free deal.

Regards Karen.

mab2000

Didn't know that you are already a virgin credit card account holder. I have just got the card and got these cheques at 0% for 16 months. Thought they may send them out to all new accoumt holders, but your not new and i would say your chances of getting these cheques at 0% are nil. And you have done the right thing in shredding these cheques in normal circumstances.

duggie1982

I would go for a card with 0% first. Make sure you get it then do the deeds. Not before though. BT Fee's are about 3-4% each way so make sure its worth your while.

Good luck!

macawac

Thank you for all the replies,

If I am not misunderstanding anything, a personal loan will cost us between £200 and £300 for the year in interest (assumng £1,000 borrowed over 12 months) and if we secure a balance transfer for at least 12 months, it will cost us only 3 - 4%, ie. £30 to £40 pounds for the year, assuming that we balance transfer before the interest is due on the cash advance, or alternatively as suggested we obtain a balance transfer deal that includes paying the thousand pounds into our bank account.

Am I missing out on any small print??

Regards,
Karen