Credit card for £20k car loan?

igiiroko

Hi all,
Some months ago I stumbled upon a suggestion on these boards for a car loan to be obtained by taking out a credit card with 0% for 20 months or somesuch. In backing up that general suggestion, there was mention of a specific card -- all I recall is it had a credit limit or transfer limit of about £20k.

Can anyone help with either the general idea or the specific card, please?

Thanks & regards,
ii

liubeliu

credit limit is usually subject to status and your credit profile. One person's limit maybe £20,000, but the same company could offer another person £2,000.

Many variables, salary, renter/owner, squeakyclean/blemished/trashed credit profile, other credit committments etc etc

igiiroko

Thanx, liubeliu. Do you mean that pretty much any of the interest-free cards will do, and that the credit limit set will depend on my credit rating? (I.e. that the specific one I saw was probably just an example?)

Secondly, and more generally, is this a sound idea -- ie buying a car on a credit card? Etc..?

Thanks again in advance...

somethingcorporate

As above - no credit card will give a general limit - they are each specific to circumstances.

Unless you earn mega-money and have a fantastic credit history I find it extremely unlikely you will get an opening balance of anything like £20k.

I earn £50k+ have little credit aside from a mortgage and my opening limit for my new capital one card was £7.5k.

JimmyTheWig

igiiroko wrote: »

Secondly, and more generally, is this a sound idea -- ie buying a car on a credit card? Etc..?

I agree with what's been said already about credit limits. But there's no reason not to use this idea (if it is right for you) to pay for half the car, for example.

Issues...
* You'll get section21 protection if the dealer goes bust, etc, which is a bonus.
* You'll normally have to pay a credit card surcharge of a few percent.
* You need to consider how you will pay the money back. After the 0% deal runs out the interest rate will shoot up. If you can't repay in this time period, what will you do? If you're planning on borrowing the money to pay off the balance (e.g. a balance transfer to another low/zero interest deal or taking a personal loan at that point) remember that you might not be able to find a bank to lend you the money at that point in time especially as you'll already have a large debt (the credit card) that they can't guarantee that you will pay off with the credit they give you.

StephenM_2

The dealer will probably charge a fee for using a credit card. 2% or so.

I bought a car recently and used a credit card, fee-free, to pay the £500 reservation deposit, but they would have charged a fee if I'd used a credit card for the balance. I used a debit card to pay the rest, fee-free.

StephenM_2

somethingcorporate wrote: »

I earn £50k+ have little credit aside from a mortgage and my opening limit for my new capital one card was £7.5k.

I have £20k limits in total spread over 2 cards, with a salary quite a bit less than that, so it can be done.

igiiroko

Thanks all. I'd previously got the impression that the 0% credit card route was a little-known but viable alternative to dealer finance. From the collective wisdom here, it seems I was mistaken. I'm now inclined take up the Audi Finance offer, which is certainly much better than anything I found on moneysupermarket.com and comparethemarket.com. Best regards,
ii

bris

It's madness, you get 20k for 20 months, you wont even come close to paying it off in that time frame. You are then stuck with the balance at near 20%. If you were a high earner who could pay it off then you wouldnt be here asking for this advice. Stick to the normal finance with balloon payment route, it will be far cheaper in the long run and you know what you are paying every month.

somethingcorporate

StephenM wrote: »

I have £20k limits in total spread over 2 cards, with a salary quite a bit less than that, so it can be done.

It can be done but very rarely on opening balances. It takes a decent track record (or a squeaky clean one) to get decent balance increases in the current climate.

A few years ago it was much easier, I had a £5k limit as a student with no income back in 2006!

StephenM_2

Both my credit cards, one with £12k and one with £8k were opening balances. One about 18 months ago, the other about 10 months.