Credit card for car - advice

bingobangobongo

This is just an idea so don't shoot me just yet.

I am looking a new car, and want to borrow £10,000 over 4 years. Best loans out there are 5.1% assuming you can get them.

Rather than take out a loan, I was looking into putting the purchase on a 0% credit card, setting up a direct debit every month. Best one is for 17 months at 0%.

Then a month or two before the 0% runs out, using a 0% balance transfer to move the balance to another card.

Could anyone tell me what the minimum payment would be on a £10,000 credit card balance, e.g. Min repay: Greater of 2.5% or £5

Would it be £250?

Heres the thing, I already have the money there but want to keep it in savings/ISAs - so I could technically pay it off any time. I am saving for a deposit for a new house.

I am also very discliplined with moving money etc so I know I would be able to do this.

Noddle tells me I have a credit rating of 5/5 - but I'm not sure just how accurate this is.

When applying for a credit card, can you get a credit limit of £10,000?

Feel free to talk me out of this if its insane.

sfax

I've done this to the tune of £15,000 towards a new car across three 0% credit cards in the past:

Pros:

much better APR than you'll get for any loan saving you £1000+ (in my case)

Cons:

You can't usually buy a car on a credit card without paying a fee and even if they don't explicitly charge you a fee, you'll get a better price for cash. You may need a super BT card in order to avoid this or some way to generate cash by paying for everything on a CC for 3 months and transferring the full balance to the 0% card each month

You may not get a high enough limit on one card (hence three used by me)

You may find it harder to get credit at the end of the BT deal and get stuck on a high APR unable to shift the balance. You'll owe less but you'll probably have more credit available and a higher debt to limit ratio when you need to get a new card.


All in all, it's high risk and you need an excellent credit rating and a method to generate cash or a super BT card. It's also high maintenance so you need to be well organised.

[Deleted User]

Personally, I'd use savings and haggle them down to the minimum cost.

You're unlikely to get a £10k limit (though not impossible) . And you'll almost certainly also pay a fee of something like 3% to the dealer.

And if you don't have much credit history (which I'm guessing) then a 0% deal is unlikely. And if you can, then BT'ing the balance for 4 years could be a big ask.

Lastly - does it need to be a 10k car?

TadleyBaggie

bingobangobongo wrote: »

When applying for a credit card, can you get a credit limit of £10,000?.

You can (I recently got a new card and got a 10K limit) but that doesn't mean you will. Be aware that many (if not all) car dealers will impose a surcharge (in the 2 to 3% region) for using a credit card.

If you can get the card and manage it well, the plan has its merits.

sfax

The other option is using a 0% purchase card but this is still worse because you'll get penalised by the dealer for paying with a CC. Generating cash or a super BT card are the cheapest methods.

At the moment Nationwide and Lloyds both have 1.5% handling fees and 20 month 0% deals so these are the cheapest if you can either generate the cash or pay with one CC and then BT

bingobangobongo

Thanks for the replies - so from reading this site, you can get cards which you can direct pay into a bank account, but they have a fee of like 4%.
So it would be better to do that rather than pay for the car using the card itself..

sfax

bingobangobongo wrote: »

Thanks for the replies - so from reading this site, you can get cards which you can direct pay into a bank account, but they have a fee of like 4%.
So it would be better to do that rather than pay for the car using the card itself..

Probably: http://www.stoozing.com/sbt

But you can supplement this if you have another credit card by using it for as much as you can (rather than using your debit card or cash) for 3 months and transferring the balance in full to your 0% card each month. This is a lot cheaper (1.5% for 20 months with Nationwide) if you spend enough monthly or even if you get friends or family to pay you cash rather than pay their CC balance in full, and then you BT the balance

YorkshireBoy

bingobangobongo wrote: »

Feel free to talk me out of this if its insane.

Which is more important to you?...a £10K [STRIKE]car[/STRIKE] credit card debt or the house of your dreams if it turns up unexpectedly?