Is a Loan right for me? (or credit card)

killerferret666

Background on the important info;

28 yr old, Homeowner, had previous loans when i was younger all paid on time, never late, never in overdraft, savings, credit rating very high. no current debt at all (other than mortgage).

I dont want to get into the discussion of stay out of debt etc... As I know thats an ideal world but you only live once and i spent 5 yrs saving to buy a nice house and the loan wont push my finances.

I want to borrow £15k for an oversea's spend. First in this day and age would I be able to get a credit card for that amount? I know many factors are accountable in this, its more do they still do them.

Credit card of course gives the security, I would ideally like for spending abroad or infact anywhere nowadays.

Is it possible to talk with my bank explain I'd like to buy on credit card for security but pay it off with a loan and the bank (barclays) agree. Or do they do an equivilant loan type that is protected like a credit card would protect you.

thanks
James

Tixy

It is possible to get a credit card with an opening limit of £15k. But you'd need to be a high earner (over £50k or so at a guess)and be assessed by them as very low risk. Most new accounts start with limit much lower than that in the current climate.

If you want to buy something that costs £15k, as long as you pay at least a deposit on a credit card the whole purchase is covered. So you could for example just pay £50 on a credit card and £14,550 on a debit card or whatever, thats providing its a single item you are buying.

So one option may be to try to obtain a loan for the majority of your purchase. Although of course being accepted for that will be reliant on all the usual factors.

In terms of a loan - no its not protected, although some finance agreements are covered by the same protection (eg buy a car from a dealer, financed through a bank, in a single agreement).

More info on the deposit and what is covered here http://www.moneysavingexpert.com/shopping/section75-protect-your-purchases

Apples2

Not many new Credit Cards will arrive with such a high limit from the outset. Normally starts low and ramps up over time. No harm in asking the bank. Online applications tend not to have any limit nominated, you get what you are given.

If you do manage to get a card with £15k on it, consider your exposure to unsecured debt becomes £15k (even though you haven't used any of it). This poses more risk on you when applying for a £15k loan.
As a genarally accepted rule of thumb, you don't want to encroach on 50% of your Salary as unsecured debt (so you should be looking to have a salary of at least £60k to still be considered an acceptable risk).

killerferret666

Thanks to both of you for the great replies.

The good news is it is a single item purchase for the price, so the answer by the looks of it will be to pay a deposit on a credit card. By the time I buy I will have decent savings towards it and proabably a £10k loan to finish it off which will cover whats required.

Apples2 - thanks for the advice on unsecured debt as well, with the above route I should be looking at around £13k unsecured which is is well under 50% of my salary. But as you say by doing the other route loan then credit card id be looking at over 50%.

thanks for the advice both of you I will now read up on credit card cover and the link provided.