Credit into ISA?

Sackagold

I never use my Barclaycard but I think I have the Barclaycard Classic:

• 0% interest on balance transfers until September 2011 from opening your account (2.5% handling fee applies)

I don't know what balance transfers are nor what handling fees are. But what I wanted to ask was this: My limit is around £1600, I won't use all this but, could I stick £1200 into an ISA, and use £100 a month to pay back the card whilst it's 0%?

My original plan was to put the £100 a month into an ISA anyway, but I'd be earning more interest by having the larger sum in there from the beginning as opposed to accumulating a hundred every month, right?

Can I do this?

This probably isn't even stoozing...:D

21castlehill

You will have a £30 handling fee (2.5% of £1200), what interest rate does your ISA pay? Say 4% so you'd earn £48 pounds a massive £18 profit for paying back a new debt at £100 a month, fail to pay of the CC in time and it will eat into your profit. I doubt you can balance transfer into an ISA so you would need to use a mule card like EGG Money first then withdraw the cash from it and transfer into your ISA from there.

Sackagold

Thanks.

From what I've found on here the best ISA is 3.2%, so it wouldn't even be £18. What is a handling fee? Me taking money out at a machine - hence handling? What if I used online banking and just switched it over?

What is a "mule card" - a card a can withdraw with without the handline fee? And I suppose you're suggesting that for 3.2% doing all this isn't worthwhile?

YorkshireBoy

Sackagold wrote: »

What is a "mule card"

http://www.moneysavingexpert.com/loans/cut-loan-overdraft-costs#mule

21castlehill

Sackagold wrote: »

Thanks.

What is a handling fee?

Handling fee is what the credit card company charge you for doing the balance transfer. 2.5% of whatever you transfer.

Sackagold

So I'd want a card with 0% handling fee. And 0% interest. But as said, it's a question of whether or not it's worthwhile as missing a month's payment would spoil everything.

21castlehill

Sackagold wrote: »

So I'd want a card with 0% handling fee. And 0% interest. But as said, it's a question of whether or not it's worthwhile as missing a month's payment would spoil everything.

Yes that would be the perfect card to use, but them deals are few and far between these days, I used them and abused them in their hayday to good effect, but back then you could borrow at 0% and earn 8% + interest margins are much tighter now. If you did get an ISA at 3.25% you would still make £8.40 profit but is it really worth the bother.

Sackagold

21castlehill wrote: »

If you did get an ISA at 3.25% you would still make £8.40 profit but is it really worth the bother.

Not in the slightest.