Credit card for paying car insurance?

danfisher

hi I'm new to credit cards but from what I can tell if I want to pay my car insurance premium(£1000-1200) in one lump with a credit card and then pay it off gradually over a year, I need a card that offers me 0% apr on purchases for more then 12 months?

Is there any hidden charges or anything else I need to be careful of, just trying to save money by avoiding the extra cost of the finance provided by the insurers, never had a credit card so i'm a bit wary of using one for such a large amount.

any help appreciated, cheers dan.

Curr946

there may be a charge form the insurance company but other than this, all should be ok and i do this year after year without issue. Though, at insurance at this price, i would be shopping around.

mgarl10024

Off topic, but have you considered cashback sites Dan? Financial products can give the best amounts which may help bring your costs down. Worth a look.

marywooyeah

depends on how long you've been driving - I'm 24 female and passed in october so my lowest quote was £1100 too. I've got an M&S credit card which is 0% for 15 months, so you could pay around £90 a month to pay it off over a year if you signed up for that.

Fruit_and_Nut_Case

danfisher wrote: »

hi I'm new to credit cards but from what I can tell if I want to pay my car insurance premium(£1000-1200) in one lump with a credit card and then pay it off gradually over a year, I need a card that offers me 0% apr on purchases for more then 12 months?

Is there any hidden charges or anything else I need to be careful of, just trying to save money by avoiding the extra cost of the finance provided by the insurers, never had a credit card so i'm a bit wary of using one for such a large amount.

any help appreciated, cheers dan.

Welcome to MSE. :hello:

The following assumes that you really know nothing about how credit cards work.

Any credit card will let you spread the payments over a year. The advantage of a 0% on purchases card is that you can spread the payments without paying interest.

You would need to have a credit card that has a credit limit of at least the amount of your insurance premium.

If you have never had a credit card before you may find it difficult to get one with a high enough limit and/or a 0% on purchases offer, despite how keen the companies seem to be according to their advertisements.

danfisher

well i've check my credit rating today, on experian and it was very good news (excellent apparently!) i've had a few financed car insurances and stored cards that i've paid off very quickly. I've just looked into the tesco card and one of the first things they ask for is your employers address, do you think I need to inform my employer that i'm giving that infomation out? And is this commonly required to apply for a credit card, It just I'd rather not give out infomation like that if i don't need to.

agrinnall

Is your employer's address a secret then? If you don't provide the information Tesco have asked for then you definitely won't get a card from them.

Oh, and you've wasted your money (or time if you were able to get it free) getting your credit rating from Experian, no financial organisation uses the score created by the credit reference agancies. You are better to get your statutory credit report for £2 (from Experian and Equifax at least, and from CallCredit if the place you are applying to checks their files too) to ensure that your files are in good shape.

Good luck but I think it's very unlikely that you'll get a 0% card with a high enough limit for a long enough period. You might be better looking for a card that charges interest but at a lower rate than the insurance company will charge for monthly premium payments.

Poosmate

There are 3 ways you can reduce your car insurance bill.

Obviously the first is to shop around.

Secondly, having shopped around, check out the insurance company you've chosen through cashback sites such as Quidco, TopCashBack and Beat That Quote. Sometimes the cashback sites will offer £30 or £60 or more for you to insure with that insurer through their site. Quidco will take £5 off your cashback (this is a yearly charge but only if you've earned at least £5 in cashback deals). I haven't checked this recently so assume they still do this and likewise not sure if the othre cashback sites have started doing this.

Thirdly, if you are going to pay with a credit card try to get a 0% for at least 12 months or try to pay it off before the interest free period ends. And a bonus would be if you could get a card that offers cashback on your spends. This could be up to 5% on the first £2k spends so on £1100 insurance cashback wold be £55 (so you're now paying £1045 for your insurance).

Hope that helps.

Poo

Gromitt

If this is your first credit card you may find out they'll only lend you £400 - £750 at the first and then increase it to £1000 or so after you've had it 3 months with several purchases gone through it. Some may wait 6+ months though.

If you go through your bank you could get a higher limit, but doubtful you'll get 12+ months interest free (although Halifax are doing some decent deals if your main account is with them)

marywooyeah

OP have you got anyone you could add as a named driver? that could bring your quote down.

Southernman

Natwest offered me a £1900 limit recently and it was my first credit card with 0% on purchases for 13 months (i only got it for the points and rewards though as i pay it off each month in full)