GMAC - Car Finance.

AdamKels

Hi,

Im sorry if this is a question that has been answered in different threads, or if the answer can be found in the stoozing articles, but i require a direct answer.

I have around £5k debt with GMAC, the car finance company. I stupidly took out the policy over 60 months in 2010 and i wish to pay it off before me and my fiancee leave for america next year.

So, i would like to pay £5k debt off in 12 months.

Would a balance transfer credit card be what i need? Could i transfer the balance from GMAC to a 0% interest card, and pay 400-450 off per month for 12 months to wipe off the debt? I realise some credit cards incur a charge, but i was just wondering if this was as straight forward as it seems.

I am paying 20.5% fixed APR at the moment, so im sure i could either find a 0% card or something that would be much lower.

Any help would be very appreciated, im new here.

Thanks again.

Eonel

Few things to bear in mind....

Have you phoned GMAC to ask for a loan settlement figure? This may be different to the amount you think you owe them.

Then get a low rate bt credit card (ideally 0%) card that allows cash transfers to your bank account. BTs will incur a fee of typically 3%. Watch out for the credit limit they give you - typically they will only allow you to bt 90% of your credit limit.

You could try asking GMAC if you can settle your account with a credit card payment. They may not allow this at all or will charge a premium. If they do allow it then you need to find a credit card with 0% on purchases.

Good luck.

AdamKels

Thanks for the swift reply, you were very helpful.

Because i don't really have a credit rating as such (i have never used a credit card), my limit would be low, around 2000 i assume. Could i take out a couple of cards to cover the 5k?

Thanks again,

Adam

Tixy

AdamKels wrote: »

Thanks for the swift reply, you were very helpful.

Because i don't really have a credit rating as such (i have never used a credit card), my limit would be low, around 2000 i assume. Could i take out a couple of cards to cover the 5k?

Thanks again,

Adam

there is no real way of knowing what limit you will get on a card until you apply.

You say you don't really have a credit rating but you do at least have this current loan. Do you have any other credit accounts?

You could in theory get 2 cards with lower limits - but there are only a limited number of issuers that do cards that allow money transfers/cash transfers. And if you get accepted for 1 that might then affect your ability to get another.

AdamKels

I actually applied for 2 credit cards, one from TSB and one from Barclays, in order to take advantage of their air miles schemes. Unfortunately i messed up, leaving these cards unused.

I haven't borrowed any other money from any other issuer.

I just called GMAC and recieved my quotation, they explained to me that paying via credit card incurs a 2.5% charge. Therefore if i applied for two cards and paid in two installments, the charge would be 2.5% on 4844.34 and another 2.5% on the remaining balance.

But on the other hand, a BT would incur a charge for both, so i really need to find one without a charge. Im hoping to have it paid within 12 months.

How hard would it be to be issued another card? I didn't think it would be that much of a problem, i thought that's how people ended up in debt! ha.

Is there any way of negotiating a credit limit with a issuer? Or is it set?

Thanks for your input. Greatly appreciated.

Eonel

If GMAC charge 2.5% on credit card payments then a credit card with a promotional rate for purchases is your best bet.

You will pay 3% on a cash balance transfer + the number of cards offering this are limited. There is no way to do it for free.

Your "on the other hand" comment is confusing - promotional rate on purchases is the cheapest option for you.

You can but try to apply for two cards but credit is not as easy as it used to be - too many people ended up in debt!

Credit limits are determined when you apply. Negotiation is normally only possible after at least 6 months of good usage.

If you still have the tsb & Barclay cards open then they will count towards your available credit even though the cards are not used. You will need to close them & wait at least a month.