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MSE News: Should you get cheap credit now amid credit crunch warning?

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MSE News: Should you get cheap credit now amid credit crunch warning?

edited 30 November -1 at 1:00AM in Mortgages & Endowments
6 replies 2K views
MSE_GuyMSE_Guy MSE Staff
1.7K posts
I've been Money Tipped! Newshound! Chutzpah Haggler
edited 30 November -1 at 1:00AM in Mortgages & Endowments
This is the discussion thread for the following MSE News Story:

"Those who need a mortgage, credit card or loan have been urged to consider snapping it up now in case costs soar ..."

Replies

  • gailey_2gailey_2 Forumite
    2.3K posts
    I say do with caution as during last crunch

    My bank Loyds demanded overdrafrt back in full within 30days ended up converting to expensive loan.

    Hubby got told by egg like many others he was undesirble and wanted his credit car balance paid it wasent over its limit.
    pad by xmas2010 £14,636.65/£20,000::beer:
    Pay off as much as I can 2011 £15008.02/£15,000:j

    new grocery challenge £200/£250 feb

    KEEP CALM AND CARRY ON:D,Onwards and upward2013:)
  • jamesdjamesd Forumite
    24K posts
    Part of the Furniture 10,000 Posts
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    I've been doing this myself, paying balance transfer fees for some 30% of my gross income in unsecured credit recently. It'll be profitable for me, I'll make or save more in interest and/or investments than the fees. Easy for me to repay this from savings and investments whenever I want to.

    gailey has illustrated what some can expect: reduced limits and demands to repay as lenders try to reduce the amount of money they need to finance or back their lending. Higher risk borrowers are particularly likely to be affected because they would need more money backing the lending than those with lower risk scores. Higher risk doesn't necessarily mean high risk - just higher than the lender wants.

    Some recent mortgages will also have clauses in them allowing the lender to increase the margin above Bank Rate even on a tracker mortgage in times of market stress. People with trackers could end up being surprised if funding becomes very tight.
  • PincherPincher
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    Since I pay off the balance to avoid interest on credit cards, I thought they wouldn't want me as a customer, but I managed to get instant approval on the 11% Cashback offer from Barclaycard. The annoying thing is, they gave me over £13k of credit limit, but the 0% Balance Transfer 2.6% Fee is only for a real Balance Transfer. You can transfer money to a cheque account, but it's not 0%. So what am I supposed to do? Spend £12,000 buying a new car on a different credit card, so I have a balance to transfer?

    The 11% cashback up to £100 is good, though and I have spent about £600 out of the £909 I need to spend already.

    In the mean time, people who need £100 pay £35 a week Pay Day loan rate.
  • jamesdjamesd Forumite
    24K posts
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    What cards do you have? RBS or NatWest maybe? Balance transfer to one of those. Ask them to refund your credit balance to your bank account a week or so later. If for some reason they don't cooperate it's possible that you would lose your balance transfer fee and have the money returned to the originating card.
  • PincherPincher
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    jamesd wrote: »
    What cards do you have? RBS or NatWest maybe? Balance transfer to one of those. Ask them to refund your credit balance to your bank account a week or so later. If for some reason they don't cooperate it's possible that you would lose your balance transfer fee and have the money returned to the originating card.

    Surplus funds are returned to original source, probably due to money laundering consideration. I tried it years ago with one of my cards, they called me up, I could either spend it or they return it.

    I could transfer say £12,000 to my cheque account on a different card (2.9% Fee), and then transfer that balance to the Barclaycard (2.6%) a few days later, which will work, but the total BT fee will be 5.5%.

    I am checking out credit card cheques. I need one that is relatively fee free. The idea is that I pay a credit card cheque into my cheque account, creating a debit on a second card, and then transfer that to Barclaycard. Because it is a cash advance, interest will accrue immediately, but provided I transfer it quick, it will be more like 1%.
  • jamesdjamesd Forumite
    24K posts
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    Surplus funds are not always returned to the original source, as I know having done what I described to you more recently than your experience. I've also relatively recently had a credit balance on a Barclaycard refunded to my current account after a balance transfer from the Barclaycard to another card.

    I still don't guarantee that your experience will match mine.
This discussion has been closed.

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