Overpaying on a credit card to then withdraw as cash, good idea?

sdotk

Hi,

I have just been approved a new barclaycard with 0% interest balance transfers for 22 months, I'm in the process of transferring 2200 odd pounds onto this from my very old and very expensive lloydstsb card (i should have done this a long time ago!).

I also have a loan from lloyds which can be settled for £2560.

I want to find the best way of getting the £2560 loan onto the barclaycard at 0% as this will make things much easier to manage however as the barclaycard does not allow money transfers or "super balance transfers" I thought of doing this...

Overpay my existing Lloyds credit card by £2560

Get Lloyds to refund this into my current account

pay off the loan


however i can imagine Lloyds wont be best pleased with this for some reason..

the other option would be to just leave the over paid £2560 on the credit card and use it as if it were a debit card until i have saved up enough money from my wage ect in my current account to pay the loan off.

I also thought maybe if this is the only option (to keep the overpaid amount in the credit account instead of refunding to barclaycard) i could just take my credit card to a lloyds branch and withdraw the £2560 i've just overpaid in cash, even if they charge me 3% it will make sense if its on 0% interest for 22 months..



Can anyone shed some light on if this will work or not?

I cant just get a credit card that will allow money transfer (i've tried) and i cant pay off loan with a credit card (has to be current account).


I've tried to make my situation as clear as possible, I'll welcome any advice!

Thanks!

Plxply

You'll be charged the standard cash withdrawal fees that you would if you were using your credit facility. As far as I know these could be exempt from the 0% offer as it can often only apply to purchases.

redpete

Several (maybe most) CCs prohibit credit balances, so your second suggestion could well not work.

I suspect the first suggestion ( new CC transfer to Lloyds CC, then transfer some of this to current account) could be prohibited due to money laundering controls - a credit could only be refunded to the source account.

missile

You cannot do what you are suggesting. In any event you would be robbing Peter to pay Paul and in the process incur charges and probably a higher interest rate.

sdotk

Ah right, thanks for your replies, I know my Lloyds card does allow overpayments as I got a refund on there for a few hundred pounds on there not long ago and they didn't seem to mind that, maybe they'll kick up a fuss in this case.

Hopefully will be able to get it sorted after the bank holiday weekend and will let you know what happens!

YorkshireBoy

sdotk wrote: »

I cant just get a credit card that will allow money transfer (i've tried)

So you've tried MBNA (including Virgin), the Post Office, M&S, Tesco, RBS, and NatWest?

All of which, in various ways, would allow you to get cash at 0% (with fees ranging from 1% to 4%) for between 16 and 22 months.

Or are you saying your credit rating is such that you can't get any card?

dzug1

sdotk wrote: »

Ah right, thanks for your replies, I know my Lloyds card does allow overpayments as I got a refund on there for a few hundred pounds on there not long ago and they didn't seem to mind that, maybe they'll kick up a fuss in this case.

Hopefully will be able to get it sorted after the bank holiday weekend and will let you know what happens!

A refund is not the same as a deliberate overpayment - they tolerate the former but may well kick up a stink about the latter, particularly if it's a sizeable sum.

opinions4u

A truly dreadful idea.

Don't do it.

Gromitt

dzug1 wrote: »

A refund is not the same as a deliberate overpayment - they tolerate the former but may well kick up a stink about the latter, particularly if it's a sizeable sum.

Some (most?) CCAs state deliberate overpayments by a sizeable amount will simply be bounced straight back to the originating account.

sdotk

Yorkshire Boy - I've tried quite a few not all that you've mentioned though but was getting bored of being declined so assumed
I couldn't get one anywhere, thanks for the list though, will see.

armyoftwo

I agree with o4u.

Very bad idea.