Help! Need to transfer and pay tax bill, what to do?

MoneyMuddle

Hello everyone
Apologies if I have placed this in the wrong slot, am a newbie and in a bit of a panic
I currently have 2k on a lloydstsb platenum card (with a 2k limit, so maxed) and I want to transfer this to a 0% card. I also however have just discovered I have a 2.5K tax bill. I realise I have left this TERRIBLY late but I have had a bad year with one thing and another and this has all just got a little out of hand.
What I need to know is if I would simply be better to get a loan to pay off the credit card and the tax, or if it is possible to try and transfer onto a 0% card, and then use this card to pay my tax bill... or would I be better to go with a credit card loan?
I also have a career development loan, but I dont start paying this back until next year when I finish my masters... and hopfully start making a bit more money
Any help anyone could give me would be really appreciated, I feel completely overwhelmed
Thanks
MM

dylanuk

Depending on how much credit limit you can get, it's worth looking at the Virgin Credit card (or any MBNA card, but the Virgin one is the best offer) - you'll be able to do a 0% balance transfer to pay off your card, and also do a money transfer to a current account as part of the same 0% promotion to cover your tax bill.

Make sure to pay the credit card with the balance transfer (not just do the whole thing with a money transfer) as the bt fee is cheaper so you'll save a bit of money.

Virgin are quite good at giving reasonable credit limits, so if you consider yourself to have a good credit rating - I'd be trying that.

Virgin is 0% for 16 months on balance transfers (2.98% fee) and 0% for 16 months on money transfers to a current account (4% fee).

You can do the money transfers via the online banking very easily once the account is open. The balance transfer you can do during card application or via online banking as well.

Be careful with the online banking though, they give two options a 'standard rate balance transfer / money transfer' and a 'promotional rate balance transfer / money transfer' - don't ask me why, it's a sneaky thing to do - but just make sure you do it via the promotional rate offer page.

Don't stress too much - if you pay late you'll just get a bill for the interest from the 31st Jan - which if you get it sorted quickly, won't be very much.

EDIT: Perhaps you should not do any transfers during card application and do the money transfer first - that way if the credit limit isn't enough to cover both, you've at least covered your tax bill.

CannyJock

MoneyMuddle wrote: »

What I need to know is if I would simply be better to get a loan to pay off the credit card and the tax, or if it is possible to try and transfer onto a 0% card, and then use this card to pay my tax bill... or would I be better to go with a credit card loan?

Your tax bill will be due 31st January? So you've got tomorrow to pay it before the automatic £100 penalty is applied.

Assuming there's nothing you can do about the £100 penalty, I would go for a 0% purchase card, use the BillPay part of HMRC website to pay the bill with a 0% purchase card and take the 1.25% fee. You'll then have 12 months to clear the card in full before the 0% period expires - be sure to make the minimum payments or you'll lose the 0% period.