0% card to fund master's degree!?

grandplonker

Hello Lovely People,

Would it be possible to use zero per cent credit cards to fund a master's degree? That's maybe £7,000 living costs and £5,000 tuition fees?

It would be very unorthodox and possibly dangerous, but I need to look at all the options. You can get postgrad study loans at excellent interest rates; my concern is 'what if I can't get a job after the degree and then I can't pay off the loan?'

0% cards would be different because you can keep moving it to a new card until you can pay it off. Oversimplification, but that's the idea. It would be a balance transfer card, or I could live off a zero percent purchases card. It's also a lower interest than a loan.

Obviously I would need a REALLY big limit on the card. I took out my first two credit cards this year. I'm 25. I have £1,000 with Aqua (needs paid every month) and £2,000 with Tesco (0% purchases, I use it to spread the cost of nasty surprises).

Grants/scholarship/bursary I'll look at later. Today I'm looking at self funding.

jonesMUFCforever

This is a stupid idea!

First of all do you have a credit card with a large enough of a limit?
If not who will lend to you without sufficent income?

If you do get past last paragragh what happens when 0% runs out and you still are unemployed?

grandplonker

Two things. First off I haven't the credit limit I would need to do that. That would mean relying on a new card, or limit increases. Even my existing limit of £2,000 on 0% purchases still helps.

Regards loans, special postgraduate loans are like a career development loan. No payments for the first two years is normal. Ulster Bank do it at 2.5%, Dankse Bank do 3%. They are more generous than a standard personal loan so salary doesn't enter into it the same way.

If I'm unemployed after I finish the course I transfer to another 0% balance transfer card. Frankly the same problems would be had by taking out any postgraduate loan.

chattychappy

I did exactly that - financed a masters via a 0% CC deal. It worked very well for me.

I was older than you when I did it and already had decent limits - more than enough to cover me. I think it's worth allowing for a generous amount of overrun.

Some places will charge extra if you pay fees by CC. Not all places require all the money up front. There are some pitfalls - eg will you have the income afterwards (as you note), will you complete the degree on time etc etc.

Whilst doing the course I did maintain a small income which meant I could keep up with the minimum repayments.

Paully232000

grandplonker wrote: »

Two things. First off I haven't the credit limit I would need to do that. That would mean relying on a new card, or limit increases. Even my existing limit of £2,000 on 0% purchases still helps.

Regards loans, special postgraduate loans are like a career development loan. No payments for the first two years is normal. Ulster Bank do it at 2.5%, Dankse Bank do 3%. They are more generous than a standard personal loan so salary doesn't enter into it the same way.

If I'm unemployed after I finish the course I transfer to another 0% balance transfer card. Frankly the same problems would be had by taking out any postgraduate loan.

How would this work of you are unemployed at the point when you need to BT. Who is going to give a 12K or so limit to an unemployed person, or any CC for that matter.

Paully232000

Thinking more about it.
What about doing it part-time.

I completed a MSc a few years ago, self-funded but I saved up for a few years before I did it from a good salary, and had a partner who earned a good salary as well. People on my course did it part-time over two years instead of the 1 year it took me, and they worked at the same time. Some funded through their work and some funded it themselves. They used holidays, flexi-time, and unpaid leave for the classes and then did the coursework etc after work and weekends. I would say in my class the majority of people did it part-time and have completed the course in the two years (I think the limit was something like 4 years part-time if you needed to).
Then you don't need the loan/CC/as much debt as you are talking about taking on.

I also did some visiting lecturing at the university I was studying at to earn a bit of money, which then led on to more lecturing when I had finished, and was experience for the job I have now.

Maestro.

You can't just keep on applying for cards with 0% interest rates and high limits otherwise everyone would just be in the gutter by now as there would literally be no money left. It would be the roaring twenties (and the resultant crash that came afterwards) all over again.

Once you'd built up high debts on the cards and then tried to apply for another, you'd likely be declined by most if not all financial institutions for showing signs of debt stress without steady income. It's ironic that those who could do with the money the most often get it at the worst interest rates (or not at all), but it's a risk assessment based on how likely you are to pay it back. Someone with debt and no steady income isn't a sure bet as is someone employed with low debt.

chattychappy

Maestro. wrote: »

You can't just keep on applying for cards with 0% interest rates and high limits otherwise everyone would just be in the gutter by now as there would literally be no money left.debt.

It's true - once you're in a position of zero income, you can't easily get new CCs.

In my case I had a number of cards and never used more than about 40% of my available credit. I continued to get 0% offers on my other (unused) cards. I did make a small transfer at the end of the course to buy more time.

At the start of the course I paid the university fees on a 0% purchase card. At the same time I used a 0% BT card to transfer a lump sum to a savings account so I could meet the minimums for up to a couple of years. I assumed "worse case" scenarios - ie failing exams, no income, no further BT offers etc. In the event I met the (escalating) minimums out of a small income I had and always got 0% offers. Although I had the cash to pay off the 0% purchase balance at the end of the offer, I did a BT so as to keep my cash "buffer". My rule of thumb was at all times to be able to "keep the plates spinning" for a further year without income if necessary.

I think the key is to be absolutely realistic about figures. I enjoyed a certain lifestyle before the course and wanted to maintain it. So I built it into the figures. At the same time, stay disciplined. Once you are in the funny world of spending on 0% cards without an income, it's easy to go crazy...

Oh "life of balance" deals can be worth considering. 0% is clearly better than, say, 6.9%. But if 0% goes to standard rate after 12 months, then over 18 months (or less depending on the standard rate) you're better off on LOB.

grandplonker

About zero income and new cards -

The credit card company doesn't know my salary beyond what I tell them, don't they? My credit file shows things like phone contracts and overdrafts; but they don't know whether I'm an investment banker or on minimum wage.

This is a flaw in credit checking isn't it; should I tell them my salary is £35,000 (when I'm a mere student not working) how would they know any better?

Sounds a little lax on the anti fraud front.

jonesMUFCforever

grandplonker wrote: »

About zero income and new cards -

The credit card company doesn't know my salary beyond what I tell them, don't they? My credit file shows things like phone contracts and overdrafts; but they don't know whether I'm an investment banker or on minimum wage.

This is a flaw in credit checking isn't it; should I tell them my salary is £35,000 (when I'm a mere student not working) how would they know any better?

Sounds a little lax on the anti fraud front.

If it is not true then it becomes a fraudelent application.
For a supposed intelligent person you are going about this the wrong way.

Paully232000

There is an org called national hunter who also have records of all your applications of credit. I believe they hold details of what you have stated on your applications and if they thought anything suspicious more questions may be asked.

You may get away with it but then again you may not, but is it worth having a fraud or similar marker on your files for the sake of not saving up to do your masters?