Advice Needed on this idea pls

philljp

Hi,

Been reading through the articles, getting a little confused on the way, so i'll put this out to you guys so you can tear it apart

If I required a £5,000 loan, would it be better to spend the £5,000 on the Amex Platinum card to rack up the spend usage for cashback. Then transfer this balance to the texaco credit card (3.9% APR).

This would then give you a £5,000 starting point for earning cashback on the Amex for the rest of the years spending.

Is this possible? or a bad idea?!

STUDENT_2-2

Er yeah possible, but is it worth it? Just BT from Texaco to your bank.

philljp

STUDENT wrote:

Er yeah possible, but is it worth it? Just BT from Texaco to your bank.

sorry? i didnt mention my bank.

Cardinal-Red

I don't know much about Amex's cashback system but seems reasonable to me.

Do you have a Texaco card set up with the required limit?

philljp

Not yet, im just investigating the options at the mo'

nh

To get 3.9% life of balance with Texaco the BT has to be done in the first month of the account being open.

So you would have to rack up the whole £5k and then apply for Texaco and then transfer the debt. Is the Amex 0% on purchases?

If so, it is feasible but also a bit of a risk because you may not get the required credit limit at Texaco.

philljp

I spose you would do it by?

Apply for the Amex card, making sure your limit is 5k

Apply for the Texaco card, making sure your limit is 5k

Make the 5k purchase on the Amex card, and transfer it over to the Texaco card.

So, is this the kind of thing people do? or is there no point?

zcaprd7

Sounds fair enough - just make sure you have both cards in place.

philljp

by applying for 2 cards, and adjusting the credit limits does this effect your credit rating at all?

nh

You can only have 3.9% life of balance with Texaco if you BT in the first month (see earlier post!!)

So if you were going to apply for Amex and texaco at the same time you would have to rack up the £5k on the Amex pretty quickly to get it over to Texaco in time to qualify for 3.9%.

EDIT: Sorry just realised you are making ONE £5k purchase as opposed to racking up £5k over a period of months.

What are you buying? It's just that for something that expensive (a car, wedding reception etc) they usually charge you 2% to pay with a credit card (to cover their own expenses)

If there is no charge then it is a great idea, you get the cashback and the low LOB rate. It is certainly the sort of thing (wise!) people do. Even wiser would be to simply switch to a new 0% card at the end of the intro period but then there are all the risks involved in maybe not being able to get a new 0% card. I know for a long-term (real) loan (not stoozing) I would rather have a LOB card. However take a look at this about offset loans, I found it very interesting....

http://forums.moneysavingexpert.com/showthread.html?t=31611

It starts off about buying a car but then moves onto offset loans, where you can borrow on 0% credit cards, offset it against a loan (so you pay no interest) and then if the 0% deals come to an end you have the original loan to fall back on, at obviously less interest than a regular credit card.