Pay off bank loan with 0% credit card?!

neuroticprincess

Can anyone tell me if it is possible to pay off a bank loan with a 0% interest credit card? I was told by a financial advisor it was although when I ask at a credit card company they say its not possible to pay credit with credit?!

Is there some way around this?

Thanks

tom188

http://forums.moneysavingexpert.com/showthread.html?t=495820 and others. Try a search, this question comes up very often.

neuroticprincess

Hiya

Could anyone possibly explain this really simply because I don't understand... The loan isn't part of a bank account like the one in the link... can you pay credit with credit? Which cards will allow this?

Thanks

GPark

I did this with an MBNA credit card, basically MBNA allow you to balance transfer to a bank account.

So you get the settlement figure for the loan, then balance transfer the money from your credit card to your bank account.

Then you just ring the bank and tell them you want to pay off the loan using the funds in your current account.

MBNA will charge you a balance transfer fee of 3% for doing this, not sure what other companies charge.

I don't know what other companies allow you to do this, I think Egg do, but not really sure.

neuroticprincess

Thank you for that... if the loan is through virgin (which I understand is part of MBNA) does that mean I couldn't also get the card through them?? I have had a look at the egg card and have emailed them to confirm that I could do it through them... better than paying the 14.9% that I am paying at the minute!!!

Thank you

ic

Don't forget that many loans will charge an early repayment fee - perhaps one or two months interest (however you'll no doubt save more than this by getting the debt onto 0% anyway).

djwolf

Sounds like a fairly good idea. A 3% charge is considerably better than loan APR rates. To do this I guess it's adviseable to open a CC with 0% interest on all purchases for 12 months to benefit fully?

My current MBNA card started charging interest on purchases after 3 months but it remains at 0% for the initial balance transfer.