Will this work?

CunningStunt171

Hi,

Im new to stoozing, and I want to use the process to clear some debt (approx 5x my monthly disposable income in the form of graduate overdrafts that are about to start accruing interest) and stick some money in an investment ISA.

I had trouble getting a virgin money card about a year ago due to my lack of credit history ("not enough information"?!) as I had never had a credit card before, so I gave up. More recently I have been able to obtain a pretty poor Halifax Clarity Card @ 17.9% APR. I've been using this over the last few months, behaving like a profitable and predictable customer to hopefully build up a solid credit trail. Incidentally this card has no fees for withdrawing cash, so my question is does it make sense to use this as a 'mule' to withdraw cash then deposit in my Current Account whilst I BT to a 0% card (I've more recently got a Nationwide 17 Months 0% on BTs 1% min repayment card).

Also, my new Nationwide card has 2x the limit of the Halifax Card. Does this I can max out the Halifax card once, do a balance transfer, then do the same again? (I've considered the fact that the 2.95% BT fee goes on the balance of the Nationwide CC). FYI the Halifax card has a daily withdrawal limit of £500 and takes 3 days to clear, so im guessing if I want £2k I will accrue 6 days interest on the first £500, 5 days on the second £500 and so on (about £4.40 total @ 17.9%) before I can make the BT?

Plenty of questions there . I hope I've furnished you lot with enough information to be effectively advised.

P.s. My missus reckons I'll be overcommitting myself, but those ODs will cost me c£50/month after June!

Cheers,

Cat2011

Basically, Yes that sounds like a good idea to me - As long as you're certain that all fees/interest to be paid will be lower than your overdraft fees, and that you can easily afford the minimum payments on the Nationwide card.

Degenerate

The plan is sound, but be aware of pitfalls:

- Make sure you have your mobile phone details registered on the Halifax ebanking site. Withdrawing the maximum daily cash allowance day after day could well be flagged up as a potential fraudster trying to siphon as much as possible off your card. If they can't contact you to verify the transactions you could find it blocked.

- With all promotional deals you'll lose the promotional rate if you're late with a payment, so I recommend setting up a DD for the minimum payment. If you do this, check whether your statement for the first month mentions collection by DD as sometimes it doesn't get set up in time and you have to make the first payment manually.

- Before going for the double-shot I'd check with Nationwide whether their deal allows multiple balance transfers. I suspect it will, usually it's as many balance transfers as you want during a fixed period from account opening (typically 60 days), but read the T&Cs carefully. Also be aware that usually you can't BT right up to the full limit, but 90 or 95%, so double check that.

- You also may find that you have to make two withdrawals each day, as many ATMs have limits on the size of individual transactions, but you should just be able to stand at the same ATM and withdraw £250 twice in immediate succession.

As long as you're careful about all these things it should work well. The 2.95% BT fee will be a big saving compared to the interest you would pay on overdrafts. So tell the missus not to worry her pretty little head, you know what you're doing.

The only slight concern I have is when you talk of putting money in an "investment ISA". If you mean a Stocks & Shares ISA, they can be very profitable, but they also bear risk so I wouldn't recommend putting anything you can't afford to lose. I'd be wary of borrowing for this purpose. Stoozers usually borrow for guaranteed profit on the arbitrage between interest rates, not for a punt on the markets.

CunningStunt171

Update (for anyone who's interested)

I am now into "Phase 2" of the plan.

I have successfully maxed out Halifax Card (£500 /day cash withrawals and deposits) and requested the Balance Transfer to the Nationwide 0% card. Unfortunately I didnt realise that this would take 7-10 days, so the costs of interest will be more like £10 (than the £4.40 I previously estimated) in the time it will take. A lesson learned there.

Phase 3 will be to start the 'withdraw and deposit' process with the Halifax CC again. Updates to follow.

sujman

CunningStunt171 wrote: »

Update (for anyone who's interested)

I am now into "Phase 2" of the plan.

I have successfully maxed out Halifax Card (£500 /day cash withrawals and deposits) and requested the Balance Transfer to the Nationwide 0% card. Unfortunately I didnt realise that this would take 7-10 days, so the costs of interest will be more like £10 (than the £4.40 I previously estimated) in the time it will take. A lesson learned there.

Phase 3 will be to start the 'withdraw and deposit' process with the Halifax CC again. Updates to follow.

I'd like to hear how you're getting on, as I plan to do a similar thing to you.

CunningStunt171

Update

The process was completed earlier than anticipated and all went through smoothly. Although I was quoted 7-10 days for a balance transfer between the two cards its was actually only 4 working days on both occasions.

Total costs for the process

2.95% of balance transfer
0.05% of balance per day on the 'mule' Halifax Card.
...and going to lloyds every lunchtime for two weeks to run £500 between the cash point and the cashier.

Halifax let me withdraw my maximum allowance every day for two weeks without so much as a call to notify me of the 'strange' behaviour on the account. Nationwide were also more than happy to accept two balance transfers from the same account within a week of each other.

I would recommend this process to anyone who cant get a proper 'SBT' card. Please remember that the BT charge goes on the balance of the card you are transferring to. Nationwide provide a handy calculator on their website to help you with this.

Over and out