Paying off a CDL loan with credit cards

TheGreatnessOfP

Hello all,

I have a CDL loan from Barclays that will start accruing interest at 9.9% very soon. I have done some research (mainly this excellent site) and decided that I will shift the debt onto credit card in order to pay less interest.

The intention is to pay everything off in full (£7,500) within 12 months. What I intend to do is apply for a credit card (or several if ncessary in order to achieve a total limit of £7,500) with an introductory 0% purchase rate (there seem to be lots of 0% interest on purchases for 12 months card available).

On receiving the card I will ring Barclays and make a payment towards paying off the debt. Here's the question:
**does this count as a purchase as far as the credit card company is concerned?** I have had conflicting answers from CC companies when ringing to enquire and I don't trust the people I've spoken to over the phone to give me a solid answer.

If this does not count as a purchase then I will do a similar method but do a balance transfer instead (this is less preferable however since I will have to pay the admin fees of circa 3%).

Thanks in advance,

P

CLAPTON

barclays won't accept a payment made from a CC.

TheGreatnessOfP

thanks CLAPTON - in that case what methods do they allow?

that seems quite strange, it's all money to them so why would they restrict their accepted methods like that?

CLAPTON

you bascially have two methods of using a CC to reduce a loan debt as neither payment as a purchase or as a balnce transfer is allowed

a. some CC allows BT to your current a/c; from there you can just pay off the loanThese are largely MBNA stable, egg

b. you can do it slowly; just use a 0% CC card for all your purchases and use the money freed up to overpay the loan (if allowed of course)


of course you may or may not get 0% CC and you may or may not get them with sufficient credit limits

TheGreatnessOfP

thanks Clapton - that's really confusing; are they leaglly allowed to dictate how I give them money? If I'm offering to pay by CC on what basis can they deny that payment?

I suppose I can go the transferring money route if necessary.

So how can I pay off a loan exactly? I didn't realise that companies could distinguish between money form a current account and money from a CC; I assumed that it was all paid by either my bank (in the instance of current accounts) or my CC company (in the case of CC payments) as cash...

CLAPTON

every corner shop can distinguish between a credit card, a debit card, cash and a cheque
it's up to the retailer/lender or whatever how they allow you to pay
read a utility bill, a council tax bill, a credit card bill or go into any shop; they can all decide on what methods of payment are acceptable (and at what price)
in any event, it's considered responsible banking not to allow credit to be paid off by credit

TheGreatnessOfP

thanks again Clapton.

so is there anyway to use my credit card to pay off the loan? (the cash transfer is an option but it's still more expensive than a balance transfer)

Norfolk_Jim

Taking your credit card would cost them money - Visa or whoever takes a % cut of the transaction - so they won't take a credit card. Likewise, some retailers wont take a credit card, noteably American Express, who charge more than Visa or Mastercard for handling the transaction.
Provided you get 0% on purchases as well as Transfers, then using the card for all purchases and diverting the money you would have handed over to paying off the sum you want to transfer is the most inexpensive option for you - but you need to be organised and spend quite a bit over 1-3 months or whatever.
Done it many times.