credit card cash

Tayus

sorry if this seems stupid but..........

is it worth taking out a credit card with 0% and put all off the cash into a savings account then just paying back the minimum each month from my current account? also if i do this how do i transfer the money into the savings account because isnt there different rates for cash withdrawals??? please help!!!!!!!!!!!

lisyloo

is it worth taking out a credit card with 0% and put all off the cash into a savings account then just paying back the minimum each month from my current account?

Yes, you should be able to make some money here.
An ISA would be better if available as you won't have to pay tax on the interest, but even if you pay tax you should make some money.

also if i do this how do i transfer the money into the savings account

Which card are you planning on using?
There are different methods for different cards.
With Egg for exmaple you simply click on a few links on their web page to giev them the instructions to transfer the money.
You are right in that it is very important that you do a balance transfer and NOT a cash withdrawal.
In general it is only balance transfers that come at 0% and if you withdraw cash e.g. at a machine, then you will be charged interest and charges.
Make sure you do a balance transfer.

Daytona_nev

Yes, DO NOT do a cash withdrawal.

These types of transaction are often exempt from the 0% rate.

Your credit rating will take a knock too. Drawing cash on credit cards in the UK gives your account behaviour score a severe beating. Drawing cash on credit cards is viewed as desperation by the credit card companies & gives them the view that you have no other means of getting your hands on cash.

Galstonian

As far as I am aware there is no way for a credit card company to share this information with other lenders. They may view it as bad behaviour but they cannot report it to credit reference agencies as such.

Galstonian

Martin also posted a warning about how interest is calculated by some companies on cash advances (Capital One but possibly others). Essentially you cannot escape interest unless you overpay or stop spending on the card - even if you clear the balance in full you will still owe further interest.

Daytona_nev

That's because many now charge interest on interest, so it takes several months to clear. ( basically until your interst charge is below 0.5p cos then they can't round up ). But some are going to bring in minimum interst charges of 50p, which means you'll never pay it off unless you overpay.

steviewander

Tayus, the moral of this story is to never make cash advances on your credit card, unless in real emergencies!

If you haven't already got an Egg card, I would apply for one if you think your credit score is good enough.

I cannot recommend Egg enough. Their website is extremely useful because they allow you to do Super Balance Transfers direct to your current account - no questions asked. This negates the need to pay cash advance charges and a bad mark on your credit rating so long as you can cope with waiting a few days for the cash to arrive in your current account.

mrtickle

Martin's appearance about Capital One on Money Box was this one:
http://news.bbc.co.uk/1/hi/programmes/moneybox/3880673.stm

his exact quote was "Never, ever, ever, ever, withdraw
cash on your credit card and if it’s a Capital One add an extra never."

Tayus

i applied for an egg card last night, when i get i'm going to transfer it all into my egg savings account is this a wise move???

Milarky

I applied for an egg card last night. When I get I'm going to transfer it all into my egg savings account is this a wise move???

Egg is as good a place as any to save with - but their rate is no more than the current Base Rate [guaranteed till Dec 2007] so they can be bettered.

Also directly transferring to an Egg savings account by Egg card balance transfer is not possible! Instead what you must do is as follows:

1) Move the balance transfer to the Egg card via your current account - click on ''Transfer a balance'' to do this

2) Once this money reaches your account - should take 2 days - use the debit card details on your current account to immediately 'transfer' some/or all of this back to your Egg savings account. [If you don't have an account with a debit card - and some people don't - then now would be a good time to get an upgrade, as they are also very handy for direct payments to credit cards]

Spend a bit of time getting to know the 'Your Money' page of the Egg website, and what is - that's the 'business end' of things, but unfortunately is not well presented. If you have any queries someone here will probably get you the answer faster than Egg, although you can now 'secure message' them on things like this.

Good luck

Tayus

ok so i'll transfer the balance to my current account (which is Natwest) then use the "make a one off payment" option to tranfer the money back into my savings account. I'm sure someone mentioned that i could transfer straight from my credit card to my savings?