is it a good idea?

sam1970

im planning to buy a new car next week and i thought of the following idea to spread the payment interest free...can anyone please let me know if im making any mistake.
the car cost £18,000 and the dealer does not accept credit card payment so im transferring the whole amount from my MBNA platinum card to my current account (for fee of £50) to pay for the car and im applying for halifax one card with 0% interest on balance transfer for 9 months and transferring the balance from MBNA card to halifax card (hopfully halifax will give enough credit) and then near the end of the 9 months trying to find another card with 0% offer to transfer the balance to for sometime. I have never done this before and im a bit nervous buut do you think it is a good idea?..any advice will be very much appreciated.

Walletwatch

Spot on - presumably you already have a high enough credit limit on your MBNA card to cover all your requirement. If Halifax doesn't give you a sufficient limit, you can try a second card to share the funding requirement to transfer your MBNA balance.

smartsaver

As above spot on. If the 0% deals dry up before the loan is paid off then be prepared to take out a loan if you don't have the cash to back it. Make sure you can afford the monthly minimum payments on a credit card for this amount. They may be more than a loan spread over a longer period. Read and stick to the T&C's or you will lose your 0% deal for missing or making a late payment, going over the credit limit or any other term you break..

It's a excellent way to buy a car with no interest!

Gotabiscuit

Walle****ch wrote:

If Halifax doesn't give you a sufficient limit, you can try a second card to share the funding requirement to transfer your MBNA balance.

I doubt very much that you'll get anywhere near the credit limit required from Halifax, unless you're very lucky or already a good customer of their's.

jonesMUFCforever

They gave me a 7k limit without holding an account with them.
Eric

JBsplit

i have a similar question along these lines if i may ask.
my car was purchesed using the dealers HP.. :eek:
its now got 2 years left to run and about 3k still to pay with monthly payments of around £160, would it be possible to settle the debt onto a credit card with 0%(and keep switching every 6 months) or am i dreaming.?
and would it make much difference to my payments.

smartsaver

Yes - if you can get the credit limit and new 0% deals. EGG allow you to pay off a loan. You can pay off the loan with any SBT card. How much you save will depend on the interest of the loan and how long it is for.

How much the monthly payments are depend on the card. With EGG I think it is 2% of the balance. With MBNA group it is £5.00

Ps how do you get the smileys on the page??

empfun

What car are you buying sam1970? All the best!

ffacoffipawb

Walle****ch wrote:

Spot on - presumably you already have a high enough credit limit on your MBNA card to cover all your requirement. If Halifax doesn't give you a sufficient limit, you can try a second card to share the funding requirement to transfer your MBNA balance.

If it happens for this post, I must say that the swear word filter on the name of the person who's post I am replying to is just a teensy bit too sensitive!

;o)

Tim_L

This is a seriously bad idea, I'm afraid.

The problem you have to consider is what will happen at the end of any zero percent deal you are on. At this point you will have something approaching £18K showing as debt on your credit report (depending on how much you can pay off in the meantime).

This will make it very difficult to get a loan at a reasonable rate. If you can't get a loan, then you are completely stuffed, because you will have to pay for the car at credit card rates (typically 15-20%), This is a quick route to serious debt trouble. The problem with cars is that the depreciation is so quick that you would not be able to sell it and pay off the complete debt.

It's possible that you might be able to sort something out at the end of the deals. But I think for a debt of this size it is essential to consider the potential downside first, which is considerable.

I have used zero percent deals to buy cars, but I always have cash to cover my risks downstream. I can't emphasize enough how important this is.

There are a couple of things to consider. Firstly, a Cahoot flexible loan is a decent way of setting up a loan facility that you don't immediately have to use. The interest rate is OK, and it just sits there until you need it, so this could be a way of covering yourself.

Secondly, 18K is a hell of a lot to pay for a car. You can get a lot of car for your money now, and there are perfectly good cars around new for 10-12K. In fact the optimum purchase strategy is generally to buy nearly new, so someone else has paid for the bulk of the depreciation. If you're doing a lot of driving, then it's maybe worth spending a lot of money on a big car, but personally, I think that the best bet is to buy something appropriate for day to day use and then hire a bigger car for longer journeys. You can get a lot of car rentals for the difference in price!

scattycat_3

IMO you need to be lining up a low% for life. card deal, during the 0% period.

Otherwise you will be caned if at end of 0% deals you have nowhere to go.

I did it the other way round, transfering a GE car loan to a Barclaycard 2.9% for life.
Quite a few CCs offer low % Life of Balance transfers, but dont, advertise that fact.
You may be lucky as the LoB offers are often made at end of a 0% period to keep you onboard.

Maybe someone else can point you to a similar deal they have used.

Scat s