Kitchen Debt ? :(

financiallyunsound

Neeewbie on the boards

Thanks for stopping by.

Purchased a lovely kitchen last year which although I paid quite a lot up front I still had a £10k 9 month interest free period which seemed long at the time ... The 9th month will elapse at the end of September and I've only cleared £3k

Thought I'd take out a credit card and use an interest free period in order to deal with the remainder by my bank has indicated that they don't allow there cards to use a balance transfer to pay off a loan of
such sorts?

No other credit card debts and a small mortgage, less than £40k.

Ideally all I really want to do is have a further interest free period wherever such a deal maybe available and I'll hope to put paid to most of the debt?

Wondered if I might get some insightful suggestions and thanking all those that have taken the time to read these few words

Keep well.

The_Moo

Just bumping this up in the hope someone can advise.

Do you know what the interest rate will be on the loan?

Assuming you are paid monthly, you will have two months' salary payments left to pay this down as much as you can.

I hope someone more useful than me will be along soon

xx

DarkConvict

I can only recommend a super balance transfer card. But they do not have limits as high as £7000. You may be able to get some of the money interest free though, but remember there are like 3% fees for balance transfers - http://www.moneysavingexpert.com/loans/cut-loan-overdraft-costs
These are special cards that do allow balance transfers from sources other than credit cards, Martin lewis was on the radio earlier this year and a chap he talked to did interest free on a car, then put the remainder on one of these cards.

Just remember when the 0% ends or if you fail to make a payment the interest will rocket up, probably pas 20% APR. So you must clear whatever is on the card before it ends.

Currently there is only 1 provider for these and if you have card already with them you will be rejected.

spikeypikey

I'm not entirely sure and you'd have to read Martin's advice on the actual site but there are a number of cards that let you take out the card and then 0% balance transfer into your bank account (with an arrangement fee) specifically I'm thinking that egg offer this and so do some MBNA - possibly the Virgin Card. I think it's called Super Balance Transfer or something similar. So you get the card, you make the balance transfer into bank account and pay the loan. Then you pay off the CC at 0%.

I think that's how it works but could be wrong. Whether this makes the most financial sense I don't know - depends on APR of kitchen load, length of 0% offer you can get on CC card as if it shoots up past the APR after period an you haven't paid off you could end up paying off more in the long run.

Sorry not sure if I've been helpful. There's a site called what's the cost that I run my APR scenarios through - that might help in terms of working out which is best for the APR advantage i.e. lower kitchen APR (if it is) or 0% followed by high APR.

spikeypikey xx

financiallyunsound

A super balance transfer card?

Umm ? That's a new one for me and something that I'll definitely look into....Unaware of the apr when the 0% expires at the end of September but being with one of the Barclays I expect it to be standard to high.

Much appreciate the suggestions and I'll give the attached links read.

Let you know how I get on )

foxgloves

We could have been in this situation had I not discovered my inner scrooge. We had a new kitchen at the beginning of this year on 'Buy now (there was a really good deal on) pay in 12 months'. We had the kitchen and have been putting money away each month to pay the bill in full when it comes due in Jan. I'm posting to say it's definitely worth looking at the financial contract for the kitchen as it should show the interst rate. If it's like our deal, as soon as you go over the 12 month period, they will apply interest back dated to when the loan was taken out, plus continue to charge it for the remaning extra term of the loan. I'm pretty sure that when we last looked at our contract, it worked out that we'd end up paying about 11 k for a kitchen that only cost just over 6k. This was suitably scary to make us step up our efforts to get the money together & we look like we'll have saved it all in time unless any crises occur. Because they are likely to apply the interest to the period that's already gone (back to purchase date), you could well be better paying it all off on a credit card at as low an interest rate as you can find, then just aim to throw everything you've got into clearing that. It's definitely worth digging out your kitchen finance agreement & doing some research. Good luck with it x

SkintGypsy

Just thinking out loud, but is it not possible to get a 0% on purchases and then use said card to do a card transaction to settle it?

Apologies if that's nonsense!

financiallyunsound

Thanks foxgloves ... you've certainly caused me to seek out the paperwork tonight and take a look as back dating to when the kitchen was bought wasn't what I'd ever contemplated In truth I'd expected to have paid the thing off but life doesn't always play out as intended.

Spoke with my bank yesterday, Natwest about doing what SkintGypsy described but they intimated they don't allow there cards to be used in such a fashion but I'm unsure if the rest of the market is the same ?

Only in possession of a Tesco credit card.

Will dig out the paperwork tonight although I do have 2 months grace but these things creep up quick

Keep you posted and thanks for the input

foxgloves

I hope you can sort something. I felt for you when I read your post because I've been worried about the same thing happening to us. There have been months when we haven't been able to pay as much into the 'Kitchen Fund' as we'd have liked.....as you say, things come up, like for instance I had a big car bill which completely wiped out one month's contribution. Our kitchen was from Homebase & my partner thinks the parent company of the finance agreement is Barclays. I'm pretty sure that for us, if we haven't paid it back by the 12 month deadline, then we are put on a 2 -year repayment plan with the interest charged from when we first had the 'loan' so backdated to when we originally bought the kitchen. We took 'Buy now, pay in 12 months' as our old kitchen had literally started dropping to bits & there were some very good offers on. I think we will have all the money saved in time, but I'd have to think carefully about doing it again, I bet finance companies are rubbing their hands when people can't get the money together in time & they can slap all the interest on. Your contract might be completely different though, so glad you're going to take a good look at it x

financiallyunsound

Thought I'd take the time to update anyone who may be interested !

After reading up on some of the options mentioned I've applied for a virgin credit card which appears to be able to do what I'd requested....Unfortunately I've only been given a £3k spending limit after approval but they've indicated that I can request an increase once the account number is generated which takes 24 hours or a little longer so I'll look to do that....Hoping to get it increased to £5k then I'll utilise that, pay off £2k with my own savings and look to pay off the remainder in 12 months.

As regards, 'garthdp' comment I guess there's no denying that the ideal way is to only buy what you can afford.

In truth I should have mentioned that I had the money from the outset when I purchased the kitchen and still have to this day but it takes so long to accrue or more appropriately to save money that I guess I'm looking to work the system, 'legally' and keep my savings working for me
and available at any moment I choose.

Anyway, as mentioned before I'm a newbie, very pleased to have stumbled on the site, its been an insight and its one I'll look to stop by from time to time.

Thanks very much .... this particular thread can now be closed or left
for someone else who may be in a similar situation, something I'll sure
will arise in which case I hope the boards have been as helpful as I've found them

Keep well