Paying off a credit card

SOSTUPID

Hi i am posting this on behalf of a friend, he has a credit card which he withdrew cash on and is now paying a very high rate of interest on. We are all going on holiday shortly and it has been suggested that we could give our friend the holiday money to pay his credit card off in full and then he could pay for the holiday on his credit card. As he would be paying the balance off in full before paying for the holiday with his card would this mean when his bill comes in the interest on it would be lower because the cash withdrawals have been cleared??? thanks

grumbler

Yes, although it doesn't even have to be the full balance. As all payments go towards the higher interest balance first, it would be sufficient just to clear the remainder of the cash advance balance.

Gizmo247

The money paid for the holiday would not be covered under Section 75 as the holiday is being purchased for a third party.

Sounds like a very bad idea to me.

grumbler

It's worth mentioning that travel companies usually charge extra if you pay by a CC.

Katzen

Leave him to his own debts, don't get involved. However much you trust him, its always just simpler not to mix friendship with money.

StuC75

What about if the card holder is the Lead Booker and is going on the holiday?

I wouldnt pay the friend too soon before the holiday is booked; but it may be the case that in the general context of..

Day 1 - You make the payment to friends CCard for your part of the Holiday.

Day "2" - Assuming Friend Has sufficient Available to Spend \ Credit Limit. Friend Pays remainder of Holiday balance on Card.

This action itself and how Card companies apply payments to highest bearing balances would probably be enough to 'rinse' out the Cash Advance balance (and more I would assume?)..

I would ensure there is as little time as possible between Day 1 & 2, and that in weeks time it doesnt become a post of :

"Former Friend was supposed to pay for Holiday, but we all fell out and cancelled the holiday, how do I get my money back that he never paid?"

Gizmo247 wrote: »

The money paid for the holiday would not be covered under Section 75 as the holiday is being purchased for a third party.

Sounds like a very bad idea to me.

Gizmo247

What if you pay off the friends credit card but for some reason the booking for the holiday gets flagged and bounced by the credit card company? You then have no money and no holiday.

Bookings should be for the lead booker and their direct family (partner, children) or for a package with an ATOL (or the like) travel agent.