Barclays want to give me £750 to not use my Visa card?

Kristenms

I have received two cheques from BarclayCard.

Its seems to me (but I would appreciate if anyone else sees a flaw in this line of thought):

I can clear the balance on my Barclaycard Visa
Write two cheques for £ 5,000 each (but not exceeding 90% of my credit limit)
Pay 2.5% handling fee
Receive 12 months interest free
Pay off the minimum amount each month, and clear the whole at the end of month 11.

... but only if I do not buy anything on that card.

If I buy anything on the card then payments will go towards paying off the £ 10,000 first, and the other purchases will accrue interest.

So, in effect, it seems to me Barclaycard is saying to me:

We want you to have £ 10,000 interested free loan for a year
But only if you don't use the card at all

My monthly balance is several thousand pounds, always paid off in full each month, seems that they will lose my business for a whole year.

Presumably I can still put purchases on my Barclaycard Mastercard ?

I have a loan which is costing me around 10% p.a. so even with the 2.5% handling fee I can reduce the loan by £ 10K (it has no penalty) and save myself 10% - 2.5% of £ 10,000 - which I make £750

Before writing cheques I will pay off my Barclaycard balance in full

Trouble is, it sounds too good to be true.Are there some gotchas I have missed?

CannyJock

Kristenms wrote: »

I have received two cheques from BarclayCard.

<snip>

Before writing cheques I will pay off my Barclaycard balance in full

Trouble is, it sounds too good to be true.Are there some gotchas I have missed?

Nope, you've got it pretty much right.

Clear the balance first otherwise it'll be stuck at the standard rate "behind" the 0% balance from the cheques. Likewise, you're spot on that any new purchases will go "behind" the 0% balance and you'll be charged interest on them.

Double check that the cheques aren't treated as a cash advance if you pay them into a current account or use them to pay direct to the loan.

Only other thing is to have a think about where you'll BT the balance to in 11 months time

Eric_Pisch

i believe you need to have a cleared balance from the start to finish of one statement to make sure you are out of interest "paying mode"

JA1000

Can you clarify that you already had the Barclaycards, I am only asking because I am looking to pay off my cards so I can then use the cards for the same purpose you are suggesting.

Thanks

Kristenms

Yes, I already have Barclaycard Visa and Mastercard.

david39

The £250 handling fee is their "interest" - so it's not really interest-free. It costs them peanuts to "handle" the transfer.

Actually, it's more than 2.5% as interest as the fee is taken up-front and the balance reduces as time goes on, so it's probably nearer 3%. And then they'll get at least another month's interest at full whack on the thirteenth month if you forget to repay it on the due date.

These are standard terms for a Balance Transfer or Super Transfer (direct into bank account) at the moment, so not exceptional.

If you are a good credit risk, it's good business for them as they are currently funding the loan to you at a much lower rate than they are "lending" it to you. Good for you, too, if you have a use for the money, as it is a much better rate than a high-street loan. Just watch for the final repayment date and make sure that you don't miss the monthly due-dates.

Mutton_Geoff

So, in effect, it seems to me Barclaycard is saying to me:
We want you to have £ 10,000 interested free loan for a year
But only if you don't use the card at all

Yes, but they whispered the second bit hoping you wouldn't hear and thus make them even more money.