Balance transfer question

boots_babe

Hello,

We're looking to buy a car, and thought it a good idea to follow Martin's advice, and use the Texaco 3.9% life of balance card as it is cheaper than a loan.

Although the car will cost about £13k, we only need to put £5500 on the Texaco card.

We haven't yet found the actual car we want yet, although expect to in the next 1-2 weeks. We will need to pay the £5500 on existing cards, in order to then do a balance transfer to the Texaco card and get the 3.9% rate.

Problem is, before we find the car, I want the finances in place. So I want to apply for the card, and request the balance transfers asap. I don't actually have a balance to transfer yet though, and although I realise I have 6wks to do the bal transfer and still get the cheap rate, I wondered whether it was possible to request the transfer now. So that Texaco would essentially pay £5500 into my credit card of choice, which would then be sat there ready for me to pay for my car when I find the one I want.

Hope I've explained all that ok :rolleyes: I only thought of this as a possibility, because last time I took out a 0% card and did a bal transfer, I overestimated the balance to transfer at the time of applying, but they still transferred the full amount - which meant that I ended up in credit on my card.

Anyone actually done this? Or have any knowledge as to whether it is possible or not? I'd really feel much happier knowing that the money was sat there ready to go.

Also, reading this forum, it seems lots of people have had low-ish credit limits from Texaco, but that those who requested a bal transfer at the time of application usually got a limit to accommodate the transfer amount.

Thanks everyone.

Rafter

Managed to get a £4k limit on the texaco card which wasn't too bad.

In order to get the money for Texaco to your current account you need an egg card too which allows you to do a balance transfer to your current account.

Step 1 - Apply for Egg Card (if you don't have one already) and Texaco card.

Step 2 - Transfer limit of Egg card to current account online or by phone.

Step 3 - Transfer limit of Texaco card to current account.

Step 4 - Transfer up to limit of egg card again to current account.

Step 5 - Put any surplus you don't need for the car into a high interest savings account until the end of the egg 0% offer.

Step 6 - Make sure you pay off the minimum balances by direct debit.

Step 7 - Make sure you are saving enough to pay for the loss in value of the car (you don't want to end up still having £1,000's outstaning on your texaco card after the car is sold, nor do you want to pay off the texaco card any earlier than you have to since the rate is probably lower than you are paying on your mortgage or other borrowing (and even if you have no borrowing you can earn more on a high interest savings account or ISA)

boots_babe

Hi rafter, thanks for such a quick reply :-)

First off, I'm guessing that in step 3, you meant to transfer the limit of the Texaco card to the Egg card, so that the debt ends up where I want it on the Texaco card?

I already have an egg card, although limit is only £3100 and we need £5500. I suppose I could follow your suggestion, and put the remaining £2400 on a different credit card. Then transfer to Egg, then follow your instructions again.

This would mean I'd have to pay for the car on 2 separate cards - would this be a problem? Also, what you've said has give me food for thought. Paying for £5500 of the card on credit card, I'll no doubt attract a 2% charge from the car dealer. Perhaps I should adapt your plan:

1. Transfer the full £3100 from my Egg card to current account.
2. Pay off Egg card in full with Texaco card.
3. Transfer £2400 from Egg card to current account.
4. Pay off Egg card in full with Texact card.

I'd end up with £5500 cash in my current account, so I could pay for the car with Switch and incur no charges, and the £5500 debt would be safely on the Texaco card.

Any reasons why this wouldn't work? I've probably overlooked something important here.....

Reaper

Your plan is fine. In fact you can simplify it even more as you can put your Egg card into a positive balance - that would allow you to reduce it to 2 steps. Although it works strictly speaking it is not allowed in the T&C, so if you are not in a rush then you can stick to 4 steps to do it all by the book.

I agree you should not try to buy it directly with a credit card as they will want a fee. If they don't you haven't negotiated hard enough and should push for another 2% off instead!

boots_babe

Thanks Reaper :beer:

Yes we are in somewhat of a rush, so might go with your speedier option!