Paying off loans with Credit Cards

ger_ryan22

Hi people, I hope you can throw some advice my way.

Basically, myself and my Wife have been living in the UK for a number of years, came over from Ireland (Republic). She brought with her her old AIB credit card which has been the bane of our lives! There is around £3700 of balance on it and we pay £120 off it (min payment) a month. I'm sure only half of that actually goes off the balance so we're down £60 a month in interest charges. It's a pain as you'd imagine. My question is, if we got a loan to pay off that CC and then used a CC from over here in the UK(she's already approved for a £4000 RBS card) to pay off that loan, would we be in for some early repayment charges on the loan? Would it make sense to do this? I was thinking then she could move that balance on her RBS card to my Barclaycard which is offering a 13month 0% on transfers (3% charge). Could this work do you think?

Thank you for taking the time to read my ramblings

Ger

Jeff_Bridges_hair

Have you asked for an early settlement price from the loan company?

Im not sure if this is correct but I would assume that the CC company would take it as a cash advance if using it to pay off the loan which itself would incur some charges.. Best to ask about that really as you could end up paying far more off then you would if you just carried on paying it off.

Stuart_W

You'd struggle to pay the loan off with a credit card, usually such loans insist on payment by direct debit. Cash withdrawals on cards generally attract extra fees.

If the £3,700 credit card debt is the problem, just look at paying as much as possible each month, rather than the minimum payment. Any spare cash you have.

Up your monthly payment to £200 and the debt is gone in two years (based on a typically rubbish 17.9% APR).

Use the Barclaycard offer (if you can) to transfer the debt to 0% for 13 months and this will reduce the amount of interest you pay on what is left after 13 months so it'll be even quicker than that.

http://www.moneysavingexpert.com/cards/minimum-repayments-credit-card#calc

IrishGypsy

If the card allows a Balance Transfer to a bank account (with a lower BT rate and fee), amd IF the OP can keep the same payment amount up and IF the BT rate (plus the fee) is less than the interest still due on the loan, then the BT to bank account and then paying off the loan would save money.

The danger here though is unless the credit BT rate is 0%, then the temptation to only pay the minimum (instead of the current loan repayment amount) would result in a much longer repayment term and thus, no benefit actually made.

ger_ryan22

Thanks for the info folks, really appreciate the advice and some things to think about there. If only you could transfer an Irish CC to a UK CC, that would makes things a whole lot easier!
I'll contact a couple of loan companies today, see what's in their small print re early repayment. I'm sure there'd be a penalty because that's how they make their money, interest interest interest!

Anyway, I'll take on board what you have said and report back.

Thanks once again, much appreciated
Ger