mortgage /credit card

iceage3

Hello users

i want to pay some money off my mortgage but thinking of using my credit card ,what does anyone think of this ,i knew its risky but its worth a try

_Andy_

Pretty silly - short term gain (possibly) if you got 0% but what are your plans after that? What would you then do if you couldn't get another 0% transfer?

iceage3

I am thinking about my interest going down on my mortgage as its much higher and with rates being so low i want to gain as much as poss

Pincher

In the good old days, with 0% Balance Transfer Fee, and the mortgage interest rate at 5.0%, it was the perfect free money deal in combination with an offset mortgage.

On a £10,000 balance transfer, you now pay £300 in Balance Transfer Fee, but save £500 in interest, so it's £200 profit, supposedly. However, you still need to make a 3% minimum payment to the credit card, every month, so the saving is eroded a little. Say, you end up £150 ahead.

It's just not worth the hassle. Also, your mortgage is probably not an offset one, so how are you going to get the money back out again to pay off the credit card when the 0% runs out?

luckyfool

Would a payment to the mortgage from the Credit Card not be treated as a Cash Advance, and hence attract fees and the higher cash advance interest rates?

Pincher

luckyfool wrote: »

Would a payment to the mortgage from the Credit Card not be treated as a Cash Advance, and hence attract fees and the higher cash advance interest rates?

Yes, some refuse to send money to a cheque account.
Then again, others will.

I have also had credit card cheques that can be used to do balance transfer.

Martin Lewis used to do workshops on TV to help you balance transfer your way from card to card. There's a verb for it I can't remember right now.

In any case, with a 3% Balance Transfer Fee, it's just not worth it any more.

Evilm

Unless you can pay it off in cash before you start amassing interest you are taking a debt with under 5 -10% interest and replacing it with a higher debt (including the balance transfer fees) with interest rates of 15% or more.

If you can afford to pay it off before the interest starts amassing on the credit card transactions then you should just pay that directly to the mortgage without involving the credit card.

It may seem like you have a lot of interest on the mortgage but that, for the amount you intend to pay off, would be much less than you would pay on the credit card after doing this.