Paying off loan with credit card

Endlessdeep

Hi all. Newbie here and brand new to MSE.

I've just read the article on transferring your debts onto a Life of Balance Transfer credit card and i just want to make sure that i understand it correctly before i go ahead with it. I've never had a credit card before and i don't want one unless it will help me with my existing debts.
A bit of background. I currently have £4000 outstanding on an AA Financial Services loan with interest of 6.7%. If i carry on paying my £120/mnth it will be paid off at the end of 2009.
If i understand the procedure correctly i apply for a M&S '&More' card with a LBT rate of 3.9% and assuming i get a high enough credit limit i then go to the bods at AA Fin Serv and say "i'd like to pay off my loan, here's my new credit card details" and the debt will now be on my card at 3.9%. I then continue to pay my £120/mnth to the card and the debt will get paid off quicker.

Is that the way it works? I saw the bit about using an Egg card as an intermediary but i got a bit confused there.

Any thoughts/help would be appreciated please.

Many thanks

tomstickland

Many credit cards only allow a balance transfer "from" another credit card, whereas Egg Money allows to balance transfer "from" a current account.

So you have to move the money
Credit Card ---> Egg Money ----> Destination
or sometimes
Credit Card ---> Egg Money ----> Current Account ---> Destination

Endlessdeep

Thanks for the quick reply.

It seems to me that doing a 3 stage transfer via Egg Money leaves the way open for complications. Is it as simple as it appears? Would i get that much of a saving by doing this or would you recommend i leave the loan as it is?

Regards

jamesd

It's as simple as it appears and it's even less prone to complications doing the final payoff via the current account than doing it by credit card.

chinagirl

Ah, but don't forget there may be mutliple Balance Transfer fees payable this way.

Endlessdeep

So if i understand this right i apply for both an Egg Money card and a M&S '&More' card. Assuming i get both with a min of £4000 credit on each i can then transfer £4000 from my Egg card into my current account (leaving my acct £4k better off and a debt of £4k on the Egg card). I then use the £4k in my acct to pay off the loan and then transfer the £4k debt from the Egg card onto the M&S card?

Is that how it works?

roswell

Nope,

You transfer 0 from your egg money, You transfer 4000 from M&S to your egg money card giving you a balance of +4000, you transfer this +4000 free to your current account. if you tranfer a - from egg money to your current account you will pay interst on it and thats not what your trying to do.

Endlessdeep

Ah!! With you. Excellent. Thanks v much.

Now it's just a matter of seeing whether i will be accepted for 2 cards at the same time.

Endlessdeep

Hi again, I've been approved for the M&S card and i'm about to apply for the Egg card but before i do can anyone help me get my head around something. At the start of the process i should have 2 credit cards, both with a balance of £0. The first step is to transfer £4000 from the M&S card on to the Egg card. Surely this is a balance transfer from the M&S card, not onto it? It can't be a transfer from the Egg card as there's nothing on there to transfer (neither a + or - balance). What am i missing?

tom188

with a credit cad you normally talk about negative balances. here you are increasing the negative balance of &more and hence putting the balance onto it. the fact that you are asking m and s to move transfer money to egg does make this seem a bit confusing i know.

saver22

Hi, I just wondered if you managed to transfer the balance succesfully from the Egg Money to the M&S card as I am thinking of doing the same.

thanks