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credit card instead of loan?

xx_lou_xx_2
Posts: 1 Newbie
Hello, please dont laugh at me.... Im not to clued up on this credit card business! Basically i want to buy a car, i want to borrow about £6000. I already have a loan with my bank, Halifax, amount owed is just under £3000. I was thinking of getting another loan with them to add on to the amount i owe but im seeing from using their online loan calculator interest amounts are really high. Ive been reading some articles on here about getting a credit card and doing a super balance transfer using either an MBNA or virgin card as the interest wouldnt be as high. Ideally i would want to transfer enough to buy a car and also pay off the rest of my existing loan...
As i said im not to clued up as ive never had a credit card before, i have a good credit rating no late payments on existing loan, no store cards or anything. What would you guys say is the best option for me to go for? And how exactly does the credit card thing work? In laymans terms please
Thank you!!
As i said im not to clued up as ive never had a credit card before, i have a good credit rating no late payments on existing loan, no store cards or anything. What would you guys say is the best option for me to go for? And how exactly does the credit card thing work? In laymans terms please

Thank you!!
0
Comments
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Hi
Basically if you are able to get a super balance transfer card it allows you to transfer 90% of your credit limit to your current account. For this you pay a one off fee of 3 - 4% fee of the amount you transfer. You then have a set period of time when that credit card debt is at 0% interest (typically 12months or 14months) in that time you have to pay the minimum payment each month but can of course pay more. After the interest free period whatever balance remains on the card is charged at the standard APR (anything from 16% to over 20%).
In your situation, having never had a credit card before you might struggle to get a 0% SBT card. If you did realistically you would be looking at a fairly small credit limit as they have no 'history' on how you would manage a card. I'd be very suprised if you could get one with a limit for more than £2k max (though depends on what you earn etc and what your credit rating is like - you might not get one at all).
The problem is these are not really suitable for long term borrowing. I'm guessing £9000 is going to take you a few years to pay back. What loan term were you thinking? How much can you afford to repay each month?
What apr is the bank quoting? what apr is your current loan? if the new loan is much higher it might be better to keep the old loan as it is and have a second loan, that does mean you'll be paying more off each month so it depends on whether you can afford it (and whether you can really afford a £6k car)
I would imagine that you might be better off with a loan for your purposes. Is this going to be your first car? would you not consider getting a much cheaper car whilst you build up your no claims bonus first?A smile enriches those who receive without making poorer those who giveor "It costs nowt to be nice"0
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