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Advice needed
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shoe_gal_84
Posts: 179 Forumite

in Credit cards
Hi all,
Although I have spent the last couple of years getting myself out of credit card debt, this situation has arisen where I have had to purchase a second hand car on a credit card. I am not looking for advice on this as it is the only option I have, but after a couple of years on MSE, I feel confident that I can clear it as quickly as possible.
I have paid for some of the car on a debit card, leaving around £1700 to put on a card. I have recently taken out a new card which is 0% on purchases for 6 months, and 0% on balance transfers for over a year.
I had always thought that I would buy the car on that card, and then transfer to another card with a 0% on balance transfers deal. But now I'm wondering if it's more sensible to buy the car on a different card and balance transfer it to the new card, so I don't have to worry about paying interest for over a year?
Does anyone have any thoughts on what would be the best way for me to save money in this situation?
Thanks so much.
Although I have spent the last couple of years getting myself out of credit card debt, this situation has arisen where I have had to purchase a second hand car on a credit card. I am not looking for advice on this as it is the only option I have, but after a couple of years on MSE, I feel confident that I can clear it as quickly as possible.
I have paid for some of the car on a debit card, leaving around £1700 to put on a card. I have recently taken out a new card which is 0% on purchases for 6 months, and 0% on balance transfers for over a year.
I had always thought that I would buy the car on that card, and then transfer to another card with a 0% on balance transfers deal. But now I'm wondering if it's more sensible to buy the car on a different card and balance transfer it to the new card, so I don't have to worry about paying interest for over a year?
Does anyone have any thoughts on what would be the best way for me to save money in this situation?
Thanks so much.
Finally, debt free for the first time since I was 18!:D
First baby born: 21/05/2014
Second baby born: 04/03/2017
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Comments
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Be aware that car dealers will usually charge you a big surcharge for using a credit card.I've seen anything between 4% and 15% quoted on forums.When I purchased a 2nd hand car for my daughter for ~ £4k from NetworkQ (Vauxhall used cars) they wanted 10% extra to put it on a card!!0
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You have paid for some of the car on a debit card but how long will the seller wait for you to be accepted for yet another card before completing the purchase ?
In purely financial terms, I would say that a longer 0% on purchases deal would be cheaper for you because there is no BT fee (3% - 5%) involved for a purchase. The later you need to transfer the balance to another card (i.e. when the 0% on purchases expires), the less you are likely to need to transfer (because you have repaid some of the debt by that time), thereby reducing the BT fee payable on the transfer when it happens.
I hope I have understood your question correctly.Warning: In the kingdom of the blind, the one-eyed man is king.
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There is a 2% fee to pay by credit card, so it works out to be £34 - not bad if that's the only interest in end up paying to borrow money!
I have a spare credit card that I could purchase the car on, and could then balance transfer to my new one. However, the rates I have at the min mean that it's interest free for much longer on balance transfers than it is on purchases.Finally, debt free for the first time since I was 18!:DFirst baby born: 21/05/2014Second baby born: 04/03/20170 -
brewerdave wrote: »Be aware that car dealers will usually charge you a big surcharge for using a credit card.I've seen anything between 4% and 15% quoted on forums.When I purchased a 2nd hand car for my daughter for ~ £4k from NetworkQ (Vauxhall used cars) they wanted 10% extra to put it on a card!!
You should always refuse to pay this. If they won't discount it then take your business elsewhere.
I bought a car over the phone from a dealer once and he wanted 5% for using a credit card. I refused to pay it and told him if I was buying the car in person with cash I'd have expected a lot more than 5% off the ticket price so really he was getting a good deal.
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Thanks for your replies. I did get money off the ticket price of the car and am happy to pay the 2% credit card fee.
Reading my initial post back, i'm not sure it made that much sense.
I have a new Natwest credit card which I was planning on using to purchase the car - it's 0% on purchases for 6 months.
However, it is 0% on balance transfers for over a year.
I have another credit card - MBNA - which I was thinking I could purchase the car with, and then straight away transfer it over to the Natwest card. I know I would have to pay a balance transfer fee of 2.9% (£49.30), but it would then be interest free for over a year.
I was just wondering what you thought was the most sensible option? I do already have some money on my Natwest card which I have balance transferred over to take advantage of the 0% deal. If I have some money on a card from balance transfer, and some from purchases - which do you pay off first when paying your card? And when the 0% on purchases runs out, can you transfer just that bit as the balance transfer money will still be at 0% for another 6 months.
Hope this makes sense.Finally, debt free for the first time since I was 18!:DFirst baby born: 21/05/2014Second baby born: 04/03/20170 -
shoe_gal_84 wrote: »If I have some money on a card from balance transfer, and some from purchases - which do you pay off first when paying your card? And when the 0% on purchases runs out, can you transfer just that bit as the balance transfer money will still be at 0% for another 6 months.
It depends on the card's Ts&Cs. Since both the purchases and balance transfers are at the same 0% rate to start with, it will depend on the start date or expiry date of each promotion.
Generally, it's still best, in my opinion, to keep purchases and balance transfers on different cards unless both promotional offers on a card expire on the same date.
Edit
MBNA's Ts&Cs include the following :-2g. If interest is charged at the same rate on different parts of the total balance on your account (for example, two transaction types which accrue the same rate of interest), then your payment will be allocated as follows:
* if your account has a promotional offer interest rate and a standard interest rate which are the same, then, we will first pay that part of the balance which is charged interest at the promotional offer interest rate;
* if different parts of the balance have the same promotional offer interest rate, then we will first pay off that part which has the earliest promotional offer start date; if different parts of the balance have the same promotional offer interest rate and the same promotional offer start date, we will first pay off that with the highest standard interest rate;
* if different parts of the balance have the same standard interest rate, or if after having applied your payment as set out above there is still a balance on your account, we will apply your payment to the different parts in the following order: card purchases, balance transfers, cash transactions and money transfers.
This arrangement is for MBNA so you need to look at the Ts&Cs for the card you use.
Hope this makes some sense.Warning: In the kingdom of the blind, the one-eyed man is king.
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