Credit Card or Loan?

nicwat

Hi all,

I'm after some advice but it's a slightly complicated story.

I'm looking to buy a used car. There are a couple I've seen, one from a dealership and one private and they're both under consideration.
The issue is that I have been looking for the best way to finance it. I have around £1000 cash that I’m looking to use and the cars are £7000 and £6000 respectively.
The dealership will accept a credit card, without incurring extra cost, so my intention would be to pay a £1000 deposit, then £6000 on a 0% purchases credit card which I still have around 9 months left on and then move the money between 0% cards until it is paid off, incurring no interest other than the balance transfer fees.
I had initially applied for a loan of £5500 at 8.5% APR before I thought the credit card was an option. I could use this loan to purchase the privately owned car, however I’d end up paying back around £800 in interest over 4 years.

I’m basically wondering if there is any other option that I have missed? Is it possible to get hold of cash from a credit card to use as the only way that I can think of is to do a balance transfer, which is also an option, however I don’t have an existing balance to transfer.

For information, the credit card is a Barclays Platinum and the loan was with Santander.

Any advice or information would be appreciated.

Thanks,
Nic

izools

Once you've had the loan for a year (as you aren't likely to get more credit any sooner due to the sizeable new obligation on your credit file) you could pay it off with a 0% purchase or 0% SBT (Super Balance Transfer) card so you only pay interest for the first year.

How long ago were the loan funds paid to you?

nicwat

The loan funds haven't been paid to me yet, I have the forms but haven't signed or returned them yet.
The main issue is that I am leaning more towards the privately listed car however that's the one that requires the loan.

Is it possible to pay off a loan using a credit card balance transfer then? I wasn't sure that was an option as it may be preferable to avoid the majority of the interest.

Thanks.

ironlady2022

nicwat wrote: »

The loan funds haven't been paid to me yet, I have the forms but haven't signed or returned them yet.
The main issue is that I am leaning more towards the privately listed car however that's the one that requires the loan.

Is it possible to pay off a loan using a credit card balance transfer then? I wasn't sure that was an option as it may be preferable to avoid the majority of the interest.

Thanks.

You can apply for a 0% card which gives the promotional rate on a 'super balance transfer', make sure this is possible before even applying. The fee is usually higher around 3-4% but funds go into a current account an then you pay whomever or whatever.

Is your credit file in tact? If so then the above option would suffice. If you go down the route of purchasing on the 0% credit card and then ditching and switching afer 9 months, bear in mind, tarting is not as easy as it used to be. So just because the idea is great in theory, you need to ask yourself what if you get declined for another 0% balance transfer card, will it put you into trouble or will you have other savings?