Topping up an ISA via Credit Card

BusterBaxter

I was thinking of using my credit card to top up my Mini Cash ISA by £2500 before interest is applied, grab the interest on the maximum amount, withdraw £2500 from the ISA and repay the credit card before in end of the interest free period. I presume this is possible with a bit of forward planning but is it legal and has anyone done it before?
Thanks

oldfella

unwise - 0% interest deals dont normally apply to cash withdrawals

Mike

BusterBaxter

Hi Mike,
I've checked my Virgin Mastercard credit card cheque details and until Sep '07 they have a 0% interest rate. I was going to use one of these cheques to top up the old ISA. Wot do you think?

ctdctd

BusterBaxter wrote:

Hi Mike,
I've checked my Virgin Mastercard credit card cheque details and until Sep '07 they have a 0% interest rate. I was going to use one of these cheques to top up the old ISA. Wot do you think?

I think you will find it will count as a cash transaction by the credit card so you get a cash advance charge and no 0% period

dunstonh

You cannot pay into an ISA with a credit card. So, it would require a cash withdrawal and the T&Cs that apply with that.

lisyloo

The virgin credit card does have an SBT (super balance transfer) facility which means you can transfer cash (according to the card tables on https://www.stoozing.com).
I presume this is using the cheque.

This is entirely legal. It's called stoozing.

Bear in mind that

1) There is a 2.98% fee which will wipe out more than half your interest.
2) You MUST make minimum repayments on time. Any failure to do so could result in the 0% ebing withdrawn and therefore loads of interest.
3) You must NOT spend on the card. If you make purchases then any payments will be applied to the 0% loan first and you'll end up paying interest on the purchases until the end of the deal.

Most people reckon that stoozing isn't worth the bother because of the fees involved these days.
There is nothing illegal in it though.
You could make about £70 in a year by my calculations.
You have to decide whether it's worth the hassle of - opening the card, making all the payments on time, closing it down and having it on your credit record for 6 years.

agal

BusterBaxter wrote:

I was thinking of using my credit card to top up my Mini Cash ISA by £2500 before interest is applied, grab the interest on the maximum amount, withdraw £2500 from the ISA and repay the credit card before in end of the interest free period. I presume this is possible with a bit of forward planning but is it legal and has anyone done it before?
Thanks

Perhaps I am reading you wrong but I think you are saying that you will receive the ISA interest on the amount of cash you have deposited by the tax-year end. This is not the way interest is applied. It is calculated on a daily basis so £2500 deposited the day before the tax-year end will only earn one day's interest not a whole year's interest!

lisyloo

Yes interest is applied daily so 1/365th per day.
My calculation was assuming you kept the money in for the entire interest free period.

Bisoy

This is entirely possible and as what lisyloo has said it's called stoozing. As Virgin card has got an SBT facility you can request to transfer direct into your current account then to your ISA.

I was in the same position last year wherein I have applied a Virgin card and maximise by putting £3000 into my cash ISA in May as my Halifax regular saver didn't mature till September and then my wife did same procedure getting a Virgin card and maximise her cash ISA. Once Virgin card promo period ends managed to transfer it again or pay it from one of our regular savers.