credit cards/income support

ascot_2

Hi - does anyone know whether there are restrictions on those on income support using credit cards to borrow say £15000 at 0% - putting in high interest account and earning £200 interest, until time to repay loan (with no charges)?

thanks - ascot

jamalfatty

Obviously we dont know your circumstances, but would suggest that if your claiming income support, highly unlikely you would be given a credit card with a £15k limit!

But no, there wouldnt be any restrictions if you can get one

ascot_2

Hi - jamalfatty

many thanks for advice - but it is not impossible to get loans on cc - especially if person credit worthy and they have been using cc for a long time.

ascot

jamalfatty

ascot wrote:

Hi - jamalfatty

many thanks for advice - but it is not impossible to get loans on cc - especially if person credit worthy and they have been using cc for a long time.

ascot

I'm not saying it is, all i'm saying however is that if someone is on income support, they must have a low income, which is the biggest factor on deciding what credit limit to set someone, therefore unlikely that someone in that situation would be given a limit of £15k

bengal-stripe

If you are on income support (or any other means tested benefits) you are allowed a maximum of £ 6k in savings without reductions to your benefits.

The £ 15k, sitting in an account bearing your name, will be regarded as your money and your benefits will be reduced accordingly. If you do not report it, you are in ever deeper trouble. You might get prosecuted for benefit fraud.

ascot_2

bengal-stripe

thanks too - but that £15k is a loan - not savings - why would it be classed as your money - when it clearly isn't?

jamalfatty

It clearly would be though if its sat in a savings account in your name, the benefits agency wouldnt care where the money has come from

ascot_2

many thanks again for advice - but still find that odd - who else apart from the BA might treat this sum as savings and not a loan - surely there is a substantial difference.

ascot

jamalfatty

I think most if not all financial institutions would see it this way, in this scenario you would have both a loan and savings

bengal-stripe

ascot wrote:

- but still find that odd - who else apart from the BA might treat this sum as savings and not a loan - surely there is a substantial difference.

For the six or nine months the money is sitting in your account, it is to all intend and purposes, yours. Even afterwards, you might not be able to pay it back in a lump sum, as this might be construed as “depravation of capital”.

If your plan is in anyway half-serious (and not just a what-if-fantasy), you ought to start getting some advice from a legal professional or a CAB.

anniecave

It's similar if you fill in that form for certain NHS treatment for free (eye tests, dental care etc) which you could get if you are on low income - in my case when I was a student, don't know if it still applies.

If you have more than a certain amount of savings you don't get anything. And it doesn't matter where those savings are or how you got them, you still have to declare them.