Best way to borrow?

DRogers_2

Hi there,

I'm not really up on how to use credit cards properly, I just purchase on mine then pay off in full when the bill comes in to avoid interest.

Basically i'm looking to borrow around £2000 for a new car, and i'm not sure what the best way to do this is. I've heard about 0% credit cards and what not but i'm still not sure how that works fully.

Thanks in advance for any tips

opinions4u

Save it up and borrow it from the savings account. Saves shed loads of interest!

[Deleted User]

Other than saving up the money yourself as opinions4u has stated, credit cards have the potential to be the cheapest way of borrowing money - as long as you are disciplined. The fact that you already have a card and pay off in full each month suggests that you are and you probably have a decent credit rating due to this habit.

What you want to do is apply for a 0% interest credit card (check out the 0% cards article on MSE) and use that to pay for the car. Whether you can do this or not will depend on where you're buying the car from...

The debt on the card will be at 0% for a certain amount of time (usually between 9-16 months depending on the card) so you have this much time to pay back before you start getting charged interest. Remember that you will still have to make at least the minimum payment each month.

For £2000 on a 12 month interest free card you can just split the debt in 12 and pay that off each month i.e. 12 x £166.66. just pay that each month and there you go - interest free loan in effect.

[Deleted User]

http://www.moneysavingexpert.com/cards/best-0-credit-cards

Here's the link to the article.