4.9% credit card or 6.2% personal loan

lotus22

Will a no transfer fee, life of balance credit card (M&S) @4.9% be cheaper to pay off £5500 over a four year term @£130 per month than a personal loan at 6.2% over the same four year term, or is there some catch?

welf_man

I don't know, but remember that the min. payment on the M+S card is 3%, so you will actually be paying £165 to start with.

Mel.

Tr@cker

The answer to the question is obviously yes paid off over the same term. BUT
Could they possibly introduce an annual fee for those who dont use the card for anything else ? Its been threatened with other cards though even at that it could still work out cheaper.

darich

There's also the temptation to spend on the card because it's low and because you don't have a bank loan you feel as though your debts are lower.
Yes it's cheaper using the ccard but worth remembering what's been pointed out.

CLAPTON

yes it will be cheaper but of course you must not use the card until the BT is paid off.

fistfullofdollars

If you have addressed the reasons why you have £5500 debt I would go for the credit card. Look at my signature I have done the same with Barclaycard.

BT my Barclayloan onto my Barclaycard via Marbles. No fees and cheeper interest. My main reason for doing it was so I could overpay my loan. Plus, I wanted all of my debt in one place.

Tirian

Also, bear in mind that a credit card is more flexible - if things change (e.g. you get an unexpected bonus/gift/payrise), and you find you are able to pay more off sooner, you won't be penalised (and will save a lot of money). Many loans will have a penalty for early repayment.

[Deleted User]

Aim to make level payments each month. If you pay only the minimum, it will take longer to clear and you'll end up paying more interest. I'd try and pay the same amount off the cc as the loan repayment would be and it should clear a bit earlier than 4 years, saving you even more!