Make Free Cash from Credit Cards - Janet & John Instructions

Grumpy_Old_Duffer

Well, I've read many articles on the "Make Free Cash from Credit Cards" but I have to admit that reading some of the messages in the Forums I am getting confused as to what to do. My scenario is that I have ONE credit card (Goldfish) which I pay-off every month. I have no debt, unless you class a mortgage as a debt.

Therefore, do I apply for, say, the Virgin Credit Card (http://uk.virginmoney.com/credit-card-v1/) and ask to take all the Credit Limit as cash; do I take all the Credit Limit and ask for it to be paid by Bank Transfer into my Bank Account, where upon I then transfer it to a High interest account or what do I do. Also, I note that in the case of the Virgin Credit Card they state that "2% handling fee (min.£2, max.£35) on: credit card cheques and some balance transfers". So would they charge for balance transfers????!!!!!!!!!

Once this is done I understand that I will have to repay the Full amount I've 'borrowed' before the dead-line (no problem), cancel that card, then start the process again with another card.

I've seen that "You should create a balance first and then transfer it to another card. Transferring fictitious balances will create problems......". HOW DO YOU CREATE A BALANCE FIRST?????

The bit I'm stuck with is the initial application and what I need to do to get the 'Free' cash into my Bank Account so that I can transfer it to earn High Interest. This is where I need 'Janet & John' instructions.

Reaper

1) Keep your Goldfish card for everyday purchases.
2) Get a Virgin card and ask to do a balance transfer (not a "cash advance") with your bank account. They will let you do this for 95% of your credit limit. You should not be charged (although some dopey call centre staff sometimes try it on).
3) When the money arrives in your bank account put it in a savings account. Keep it separate from your other savings so it doesn't get mixed up.
4) Pay the minimum amounts each month. In the case of Virgin that's just £5.
5) Just before the 0% runs out either repay it from your savings or balance transfer the debt to a new card.

Queenie

G.O.D - thanks for asking what I've been wondering ...


... Reaper!! Lean over here, I'm gonna give you a big fat smackeroony kiss on the cheek!!!!!! :-X You've just simplified it all for me and I THANK you!!

Grumpy_Old_Duffer

Reaper wrote:

4) Pay the minimum amounts each month. In the case of Virgin that's just £5.

So, if you have to pay a minimum (£5) a month and you hold the Card for 9 months that has cost me £45!!!

If the Balance Transfer was for £3,000 and I could earn 5% p.a. that would mean I have earned (approximately) £3,000 x 5% = £150 p.a. or about £112.50 for the 9 months less my monthly payments of £45 = £67.50.???

JMU-95

Queenie wrote:

G.O.D - thanks for asking what I've been wondering ...
... Reaper!! Lean over here, I'm gonna give you a big fat smackeroony kiss on the cheek!!!!!! :-X You've just simplified it all for me and I THANK you!!

ditto, Reaper .... I was pretty sure I knew how to do it but I wanted to find "instructions for dummies".

Thanks for helping.

JMU

Walletwatch

Grumpy_Old_Duffer wrote:

So, if you have to pay a minimum (£5) a month and you hold the Card for 9 months that has cost me £45!!!

If the Balance Transfer was for £3,000 and I could earn 5% p.a. that would mean I have earned (approximately) £3,000 x 5% = £150 p.a. or about £112.50 for the 9 months less my monthly payments of £45 = £67.50.???

Wrong - your monthly payments of £5 go towards reducing your principal balance, and so you should not be deducting it from the credit interest you get from the savings account. You should however deduct the 2% or £35 max that is charged for the BT, so you make a net of 112.5 - 35 = £77.5. Do it with a balance of £10000 (assuming a higher credit limit) and you make £340 or £35+ per month for nine months !!!

Reaper

Like Wallet watch said the £5 per month is being paid off your credit debt so it is not really costing you anything.

However he is wrong about the 2% fee. Virgin should not charge you anything for doing balance transfers throughout the 0% interest period (according to the latest info given to Martin). They are the one exception in the MBNA family of cards. Sometimes call centre staff are not aware of the rules, however, and might try to charge you. Don't let them!

steve$$$$$_5

Just in the process of taking out 'another' Credit Credit Card,this time
with Virgin.
Phones Call centre to enquire about BT charges and was told "yes you
would be charged".
So sent an email to Virgin Customer services asking same question and
got the following reply :

Thank you for contacting Virgin Money regarding your interest in the
> Virgin
> Credit Card.
>
> I have been in touch with my Credit Card team today and they have
> confirmed
> that we would not apply a fee for transferring a balance from your
> existing
> Credit Card to ours.
>
> The Credit Card team also confirmed that it is possible to transfer an
> overdraft on to the card.
>
> Should you have any further questions please feel free to contact the
> Credit Card team on 0800 096 9929.
>
> Kind Regards,
> *********,
> Virgin Money.

So I am going ahead with the application and have this info in writing and
do not expect any BT charges.

Hope this helps others

Queenie

Thanx Steve - methinks poor Virgin are going to be swamped!

Reaper

It doesn't have to be Virgin. I just used the cards Grumpy_Old_Duffer was talking about for the explanation. Another popular option is Egg which also allows you to transfer money to your bank. I don't want to confuse a simple explanation but you might find a summary of the differences between them useful as these are the two most popular cards for this sort of thing:

Egg
* 0% on balance transfers until 1st October 2005
* You can transfer 100% of your credit limit
* No balance transfer fees at any time
* A repeat 5 months interest free offer every year starting on the anniversary of when you took the card out. (Balance transfers must take place in the first of the 5 months to qualify.)
* The minimum repayment is 2% of the balance each month

Virgin
* 0% on balance transfers for 9 months starting from the day your card is issued.
* You can transfer 95% of your credit limit
* No balance transfer fees within the first 9 months, 2% fee after that
* No further offers, although you might get lucky when you phone to cancel.
* The minimum repayment is £5 each month


EDIT: Made the correction pointed out in the next post

Detail_Merchant

A slight correction. I've done all my Virgin BTs except for the first via their web-site, so similar to Egg there.

Cheers,

Detail Merchant