car on credit card

kocagilli

Hi Guys,

I need to buy a new car and have been looking at a couple of options and think I have come up with a pretty good way to do it without paying any interest on money borrowed. Basically I would like your opinion on the following plan. Hopefully its good, if it is not then maybe you can explain to me why it would be a mistake.

I have a sainsburys credit card with 0% interest on purchases for 12 months(thanks Martin!). If I was to increase my credit limit to say £5000 and buy a car I would have up to November to pay off my debt. If I was unable to pay it off by then all I would do is become a credit card tart (shameful I know ). With all these 0% on balance transfers would I thus not have purchased my car with borrowed money and not have to pay anything back until i was ready meanwhile not paying for a penny of interest in the process. Although ideally I would look to settle my bill within 3 years.

The only problems I can see with this are the following:
1) I need to purchase a car <£5000
2) I need to be successful in increasing my credit limit.
2) Do not use the card for anything else.
3) Be able to find cards with interest free balance transfers with limits
covering my debt.

I hope I have not missed out anything too obvious look forward to reading your views.

Thank you in advance

Regards
Kocagilli

JasonW_2

It is a risk you take that you are able to get new 0% cards when you need them, but remember there could come a time in the near or distant future where there is no such thing as 0% rates anymore, so you would need some way of funding the purchase.

Also, the garage would have to pay (apparently) around 2% charge for using the credit card, but Im sure if you offered to pay this fee to the garage, they would oblige! Of course, the 0% now becomes technically 2%, unless you can negotiate a better deal on the car first, then offer to pay the fee, but ONLY if they mention it to you, and that way, hopefully it is still under the price you would have paid before, or the fee works out at something silly like 0.005% LOL.

Of course, as you say, you need the credit limit increase first, so you best try there first and see what they say

J

North-East_Quine

I recently bought a car at £4,600 which I had hoped to pay using my AMEX credit card and to get 1% cashback. The garage said that was okay but that they would charge a 2% fee for using a credit card. As I had the cash in the bank I opted to pay using Switch (no additional charge).

It seems to me that the customer never wins!

JasonW_2

Yes, but like I say you can win, if you are successful enough to negotiate a better price on the car first. Just try and avoid telling them you want to pay by CC, but just say you dont want finance. If you can negotiate even a 2% discount on the car first, but the more the better, then when it comes to paying the 2% fee, you are no worse off than you would have been. If a salesmen thinks you are a cash buyer, then if you threaten to walk away and call the deal off, he is likely to offer a better deal.

Of course, if you could get an egg/virgin card with a decent limit, you can SBT the amount you need to your bank account, and still try and get a better deal on the car.

J