credit card or loan?

pukkamum

Hi we go on holiday in 3 weeks and will have to borrow the spending money which we estimate to be around £1000 - 15000.
We have a barclaycard which i believe is one of the better ones for spending abroad so will use that for paying and withdrawing cash.
My question is about repaying it, at the mo it has £200 on it with a £2,500 limit, this is all we owe and i overpay by £10 per month.
I can afford to pay back £70 per week/£280 per month.

I have been looking at a Zopa loan which i think we may get accepted for to borrow £2000 at £98 per month over 2 yrs, but wonder if i should just pay £70 per week to the credit card instead.

I'm sure the answer is obvious but i keep going round in circles as i hate debt and a loan seems like a lot of debt!

DCFC79

pukkamum wrote: »

Hi we go on holiday in 3 weeks and will have to borrow the spending money which we estimate to be around £1000 - 15000.
We have a barclaycard which i believe is one of the better ones for spending abroad so will use that for paying and withdrawing cash.
My question is about repaying it, at the mo it has £200 on it with a £2,500 limit, this is all we owe and i overpay by £10 per month.
I can afford to pay back £70 per week/£280 per month.

You do realise that drawing cash from a CC is a costly move as you get whacked with a fee but hey why stop there, your borrowing the spending money, your estimation of spending money cant be right @ 1k to 15k as thats alot of spending so i guess thats an error so maybe the 1k to 1.5k is better but still alot.

Can i just ask but why did you not save the spending money ?

Dont know about you but i save for the holiday as a whole, book somewhere with the money then whats left i use as spending money and if i need any more i use my cards.

iluvsaving

I wouldn't withdraw money from a Credit Card:

Yes - a cash transaction fee is applied to the amount you withdraw from a Cash Machine or bank.

Also, you would be charged again for the conversion of pounds to another currency of 2.99% and also between £1.50 to £4.50 per transaction withdrawal from an ATM.
http://ask.barclaycard.co.uk/help/brochure/1_creditcards/atm_charge

A loan would potentially work out cheaper as it is likely to have a cheaper interest rate and will have fixed term with repayments. You could also overpay which would reduce the amount of interest you pay and the term.

pukkamum

DCFC79 wrote: »

You do realise that drawing cash from a CC is a costly move as you get whacked with a fee but hey why stop there, your borrowing the spending money, your estimation of spending money cant be right @ 1k to 15k as thats alot of spending so i guess thats an error so maybe the 1k to 1.5k is better but still alot.

Can i just ask but why did you not save the spending money ?

Dont know about you but i save for the holiday as a whole, book somewhere with the money then whats left i use as spending money and if i need any more i use my cards.

It was a pretty last minute thing we had saved the money to pay for the accomodation and flights but accepted that we would have to get in debt for spending money, it is our first holiday abroad for 7 yrs so we intend to enjoy it and know we won't be doing again for a good few years and yes it was 1500 not 15000!!!! That would be a gooood holiday hahaha.

pukkamum

iluvsaving wrote: »

I wouldn't withdraw money from a Credit Card:

Also, you would be charged again for the conversion of pounds to another currency of 2.99% and also between £1.50 to £4.50 per transaction withdrawal from an ATM.
http://ask.barclaycard.co.uk/help/brochure/1_creditcards/atm_charge

A loan would potentially work out cheaper as it is likely to have a cheaper interest rate and will have fixed term with repayments. You could also overpay which would reduce the amount of interest you pay and the term.

Thank you good info there i was just going off Matins good cards to use article, are you saying you would get the loan and use that for spending, would you suggest buying euros beforehand?

I was intending to pay CC straight away with loan money if we went down that route, so would only pay the withdrawl fees not interest.
If that makes any sense at all!

pukkamum

p.s we have got £500 in savings that i intend to use to buy euros beforehand for transfers and damages deposit.

pukkamum

pukkamum wrote: »

Thank you good info there i was just going off Matins good cards to use article, are you saying you would get the loan and use that for spending, would you suggest buying euros beforehand?

I was intending to pay CC straight away with loan money if we went down that route, so would only pay the withdrawl fees not interest.
If that makes any sense at all!

Just read this on the website

For every non sterling transaction made on your Barclaycard, a fee is charged. If you withdraw cash on your Barclaycard while abroad you will only be charged a single transaction fee and receive up to 56 days interest free, if you pay your balance in full and by the due date shown on your statement each month.

So surely if i took out a lump sum each week it would cost a lot less?

iluvsaving

pukkamum wrote: »

Thank you good info there i was just going off Matins good cards to use article, are you saying you would get the loan and use that for spending, would you suggest buying euros beforehand?

I was intending to pay CC straight away with loan money if we went down that route, so would only pay the withdrawl fees not interest.
If that makes any sense at all!

Withdrawing from the Barclaycard at ATM's will charge you for using your card, charge you 2.99% of the amount and the ATM will charge you between £1.50 and £4.50 so having Euros already avoids these costs, it would be cheaper to withdraw from a debit card also.

If you know how many Euros you will need for the trip then you could buy them before to avoid paying conversion rates and withdrawal costs.

Paying for things in shops reduces the amount of charges on your Barclaycard.

For every non sterling transaction made on your Barclaycard, a fee is charged.

http://ask.barclaycard.co.uk/help/brochure/1_international/foreign_charge

The Halifax Clarity Card gives you free purchases abroad.

No fee to transfer a balance
No cash withdrawal fee
No fee to use it anywhere worldwide
No annual fee.

http://www.halifax.co.uk/creditcards/low-rate-no-fee/clarity-card/

So if you were to use this card it would be free to buy things in shops whereas the Barclaycard will charge you.

bargainbetty

Check again, because cash withdrawals often incur interest from the first date - you don't always get an interest free period on cash. If you are thinking about doing this, then be really sure it applies to cash advances.

If you must borrow money, I would risk the interest and use the card. Pay it off as fast as you can. Getting a loan over that period just seems silly. I know you want to enjoy the holiday, but you don't have to go silly and run up fortunes!

Best of luck

iluvsaving

pukkamum wrote: »

So surely if i took out a lump sum each week it would cost a lot less?

The Transaction Fee is 2.99% of the amount of the transaction and will be charged on cash transactions and non-sterling transactions.
1. Cash transactions include cash withdrawals and purchases of foreign currency or travellers’ cheques.
2. A non-sterling transaction is a purchase or cash withdrawal made in a foreign currency, like Euros or Dollars.

So the fewer the transactions you make the fewer charges BUT you will be charged 2.99% of that withdrawal.

pukkamum

Have thought about the Halifax clarity but we have taken such care to rebuild our credit rating after stupidness many many years ago i would hate to have a lot of credit searches on our file hence looking at Zopa as they do a soft search also i am worried about us not getting the limit we need on a new card, any advice much appreciated.