just want to check I am doing this the best way

haras_nosirrah

My husband and I are looking to go to Mexico in May for 2 weeks

Have found a holiday for £2,350 for both of us and just looking at the best way to pay for it.

The company charge 2.5% for using a credit card but my thinking is this is better than potentially not being protected should the company go under.

so holiday comes to £2350 + £60 = £2410

Have managed to find 5% cashback via quidco = £2288

Have ordered a cashback credit card which pays 5% cashback up to 2k in first 3 months so that would be £100 off

total £2188

The balance I am now debating. The cashback credit card doesn't come with any more than the standard 56 days interest free so am not sure whether to transfer the balance to another card which has an interest free period e.g. 15 months interest free costing circa £65,

withdraw the money from my ISA paying 3.5% interest currently but then can't put it back (have 3.5k in ISA so have the money to clear the holiday)

or lastly to leave the ISA money alone and instead I have a 2k overdraft facility charging max of £5 a month (Santander)

My current line of thinking is to go for the overdraft. As long as the overdraft is cleared in under 13 months then it works out the cheapest overall (I think it would take about 4 months to clear the overdraft as we overpay the mortgage by £500 a month and would clear the overdraft instead)

Just want to check I have my maths right and to see if I have missed anything obvious or if it is higher risk having the money in the overdraft then on a credit card.

Thanks

Malky

haras_nosirrah wrote: »

have 3.5k in ISA so have the money to clear the holiday

So why ask about credit cards and overdrafts? You're wasting your time looking for the best way to borrow money when you already have savings to cover the payment. I don't understand! You'll enjoy your holiday a lot more knowing you paid for it in cash. I'm sure you will be able to build up your savings again in the next 6 months.
Remember, this is MSE so why borrow when you have the funds in place already?

thenudeone

You only need to spend £1 on the card to gain the protection you want, not the full amount.
http://www.moneysavingexpert.com/shopping/section75-protect-your-purchases

haras_nosirrah

Malky wrote: »

So why ask about credit cards and overdrafts? You're wasting your time looking for the best way to borrow money when you already have savings to cover the payment?

A very valid point. The main reason was I thought you had to have everything on the credit card to be protected. The £100 cash back is tempting though from the cashback credit card.

Gromitt

Sounds to me like you want to Stooze, and why not?

If you can get approved for the Capital one 5% cashback card then do it. Pay for the holiday on that card, get the £100 cashback and then setup another card with something like a 20 month balance transfer. Setup direct debit to minimum amount each month and pay off the remaining at the end. Meanwhile your savings are earning interest. 20 months interest on 2K will give you another nice discount for your holiday.

If you can get approved for offers like the above, then take advantage of them, just ensure you following the golden rule: Always setup a DD!

bouncydog1

Yes good idea, but remember that if you transfer the balance then you are likely to have to pay a 3% fee on £2k = £60, so your saving will be £100 cashback - £60 = £40, plus the interest on £2k, which will reduce each month as you repay by DDM unless you can fund the payments from elsewhere. Still worth having even though your saving won't be quite as much as you thought.

Another option might be to ring around your card providers for any cards that you currently have with nil balance on and see if they will give you either a 0% BT or reduced fee BT to keep your business.

YorkshireBoy

thenudeone wrote: »

You only need to spend £1 on the card to gain the protection you want, not the full amount.
http://www.moneysavingexpert.com/shopping/section75-protect-your-purchases

...but be sure to read the "exceptions" section, especially if booking through a travel agent (under certain circumstances) or booking a 'tailor made' holiday.

OP, if you want to shield the ISA cash from tax (going forward over the years) then you should look at putting the deposit on any old credit card and using the M&S card Sterling travellers cheque loophole to finance the rest. The cost of this would be 1%.

haras_nosirrah

Thanks for the above. I was thinking of the overdraft instead as I recon I can repay from salary in 4 months which would then cost £20 in overdraft fees rather than £60 in balance transfer fee - I am too nervous to leave a huge sum on a credit card incase a change in fortunes means I have to use my savings for something else rather than credit card repayment.

@ Yorkshire boy - what is the m&s card travellers cheque loophole?

YorkshireBoy

haras_nosirrah wrote: »

@ Yorkshire boy - what is the m&s card travellers cheque loophole?

A method of obtaining cash at 0% for 15 months, for a 1% fee.

haras_nosirrah

@ yorkshire boy - where on the guides is the m&s thing? Can't seem to find it apart from in old forum posts

YorkshireBoy

haras_nosirrah wrote: »

@ yorkshire boy - where on the guides is the m&s thing? Can't seem to find it apart from in old forum posts

I don't think it's on the "guides", but in brief...

M&S treat travellers cheques and foreign currency bought from them with their credit card as a purchase...not a cash advance.

1. Make sure your current account provider will accept Sterling travellers cheques (some don't, others charge a fee).
2. Obtain an M&S credit card.
3. Buy Sterling travellers cheques with it from M&S (1% fee applies).
4. Pay cheques into your current account.
5. Wait for them to clear.
6. Use the money!