0% credit card help

fuzzgun19

Myself and DH have not used credit cards for at least 7 years.
We would like to know if it's possible to get a credit card in order to use it to pay car finance off?
Our thinking was to try to get a 0% card to avoid paying interest when the 0% on the car finance ends.
I don't know if we would even be accepted for a card as I don't think we have much credit history. The only debt we have is the car finance and about £100 on a catalogue.
Could anyone advise?

longtermplanner

You won't get a 0% card without a good credit history. Here is how to check yours: http://www.moneysavingexpert.com/loans/credit-rating-credit-score

What will be the APR on the car finance when the 0% ends? How much will remain on the loan?

fuzzgun19

I think the APR is 20.2%?




The total amount was about £5,000, and there will be about £2,000 left to pay off, the 0% ends in July 14.

grumbler

A big difference between 10% p.a. and 20.2% APR is odd.
Are there any other fixed costs related to getting or paying off this loan that can explain this difference?

fuzzgun19

I don't know about the APR difference.

When we took this out, we wanted a 0% deal, the dealer didn't do this as such but said they would pay us some money each month which would be what the interest was, which they have been doing.
We were expecting a sum of money in the following months, and planned to pay it all off with this, but have now learned the money is not coming.
So I was hoping there may be another way to avoid/ make cheaper the 'interest' after July.

I did the MSE checker, I had 0% chance, and DH had 70/80% chance of a 0% card.

CLAPTON

fuzzgun19 wrote: »

I don't know about the APR difference.

When we took this out, we wanted a 0% deal, the dealer didn't do this as such but said they would pay us some money each month which would be what the interest was, which they have been doing.
We were expecting a sum of money in the following months, and planned to pay it all off with this, but have now learned the money is not coming.
So I was hoping there may be another way to avoid/ make cheaper the 'interest' after July.

I did the MSE checker, I had 0% chance, and DH had 70/80% chance of a 0% card.

the 10% is a 'flat' rate : basically a well known car dealers fraud; so the true APR is the 20%

does your loan allow payment by credit card?
if not (and that's often the case), then you will need a card that allows BT to your current a/c ; not many do but MBNA stable and Post Office do.

knightstyle

Nothing to stop you applying for a couple of credit cards, not necessarily currently 0%, and when they arrive wait till you can transfer the car balance to them at 0% for a small fee. Several are offering over a year at 0% the moment.
I think your problem will be getting the transfer to the credit company as 0% is usually to another credit card but some do it to a bank account however, these deals change from month to month.

fuzzgun19

CLAPTON wrote: »

the 10% is a 'flat' rate : basically a well known car dealers fraud; so the true APR is the 20%

does your loan allow payment by credit card?
if not (and that's often the case), then you will need a card that allows BT to your current a/c ; not many do but MBNA stable and Post Office do.

I'm not sure, how would I find out?
They knew we were planning to pay off early, so I assumed we could just pay with any card.

Do you mean balance transfer to an MBNA or Post office card? Sorry I'm rather new to all this.

grumbler

fuzzgun19 wrote: »

They knew we were planning to pay off early, so I assumed we could just pay with any card.

You can't just 'assume'. Most loans can't be paid by a CC, so check if yours can.

Do you mean balance transfer to an MBNA or Post office card? Sorry I'm rather new to all this.

MSE article:
Balance Transfer Credit Cards
>> Balance transfer your overdraft too

See also

• Super transfers

fuzzgun19

grumbler wrote: »

You can't just 'assume'. Most loans can't be paid by a CC, so check if yours can.

Looking at the agreement, it states -

"4.4. The following charges will apply for using certain repayment methods:

4.4.1 £12.00 for each repayment by credit or debit card.
4.4.2 £17.50 for setting up a standing order arrangement."

So, this means I can pay by any card?


When the '0%' finishes in July, I have a lump sum of £2000 cash that I want to pay off the loan. This will leave approx £2000 left to pay.

The agreement also states -

"If you repay the amount of the credit early, in part, under clause 2.5 above we may reduce the repayments in order to preserve the duration of this agreement."

So if I payed the £2000 cash off it, my repayments would drop, but still be at 20% APR?

CLAPTON

the rate of interest will still be 20% APR; however the more you pay off the less the actual interest charged

e.g. if you owe 4,000 at 20% the monthly interest would be
4,000 x 20%/12 = £66.67 per month

if you paid off say 1000 then the monthly interest would drop to
3,000 x 20% /12 = £50 per month

so it's worthwhile paying early