i have a Plan.... 0% balance transfer

bootleggeruk

Hi Guys,

Shoot me down in flames if you want but i have an idea to avoid interest on a loan and want to put it by you....

I owe £2000 on a Credit Union loan that i pay off at £40 a week(£31 payment £9 Interest) With 65 weeks left to pay.

I have a Capital One Credit card £800 limit, and a Vanquis Credit Card £1250 limit both are unused and have a £ZERO balance at the moment.

I have just opened up an Flex account with Nationwide which also gave me a Nationwide Select Credit card with 0% on balance transfers for 26 months.

You can see where im going here....

If i withdrew cash from both Vanquis & Capital one cards upto the limit this makes £2000. And then use the cash to pay off the Credit union....

Transfer the debts on the 2 credit cards to the new Nationwide credit card paying off at £40 a week it gets paid off in a year with 0% interest? saving me 3 months off & interest!

I keep running over the facts thinking is it the right thing to do?

What am i missing?

Help very much appreciated....

fozmcfc

In principle yes, it will work.

Where you might fall down, is that I doubt you'll be able to draw cash out to the limit of both cards. Some cards allow only a certain % of the limit to be used as cash withdrawals. Some cards don't allow it at all to all customers.

When you withdraw cash, you will immediately incur interest on that cash from day one, so you will have some interest from the cash withdrawals, until the transfer is complete.

As interest is charged daily, you might also find that Vanquis and Capital One will charge you an overlimit fee, after the first days interest goes on the balance.

You also will pay a balance transfer fee on top of the balance you transfer to the Nationwide card.

So at the least, you'll end up with maybe 4 or 5 days worth of interest on £800 from Capital One, 4 or 5 days interest from £1200 on the Vanquis card and 2.4% balance transfer fee on top of £2000. You could end up with an overlimit fee on both cards and therefore black marks on your credit history.

bootleggeruk

Mmmm, Good idea in principle but falls down on the cash withdrawal interest fees.

Maybe back to the drawing board....

Thanks

redpete

As well as the interest charged for cash withdrawals there is the cash advance fee (3% for Vanquis).

So that's maybe 3% on the cash advance plus a small amount of interest, maybe 3% balance transfer fee - how does this compare with what you are paying in interest on the loan?

bootleggeruk

The loan at the moment is 12.5%