Car Insurance on Credit Card

lou1990lou

Hi all,

I have compared car insurances and have found that paying the annual amount is so much cheaper than paying monthly (double the amount in a lot of cases!! :O :O).

I was thinking of getting a new credit card with a higher credit limit (I currently have one that doesn't have a high enough limit) and paying the whole annual balance using this.
I would then set a direct debit up from my current account to pay this amount off monthly.
My question: If this credit card was 15 months 0% purchase interest (for example M&S) am I right in thinking that if I don't pay my full balance off I don't start paying interest on my balance until the end of the 15 months?
Or is there another interest rate I should be looking out for (i.e the APR)?


Example scenario:
Insurance = £800 for the year.
Pay for it on the 15 month 0% purchase interest card (16.9% APR).
Set up a direct debit for £67 per month [based on paying it off over 12 months].
1st month: balance = -800
second month = -733
etc.
If I don't pay the whole 800 off before the next month, would I pay interest on this? or would my balance in the second month be -733?

Or is it after the 15 month period that I start paying the interest?

YorkshireBoy

lou1990lou wrote: »

Or is it after the 15 month period that I start paying the interest?

Yes.......

ricky_v

It is generally advisable to pay insurance anually with a 0% card even if there's a 3% charge as it is alot cheaper than paying monthly.

Same goes with line rental.

Ensure the card is cleared before the 0% offer ends.

lou1990lou

YorkshireBoy wrote: »

Yes.......

ricky_v wrote: »

It is generally advisable to pay insurance anually with a 0% card even if there's a 3% charge as it is alot cheaper than paying monthly.

Same goes with line rental.

Ensure the card is cleared before the 0% offer ends.

So as long as the whole card is cleared before the 15 month period I don't need to worry about paying the interest?

Scrounger

lou1990lou wrote: »

So as long as the whole card is cleared before the 15 month period I don't need to worry about paying the interest?

Correct (and, of course you make the minimum monthly cc payments :eek:).

Scrounger

grumbler

ricky_v wrote: »

It is generally advisable to pay insurance anually with a 0% card even if there's a 3% charge as it is alot cheaper than paying monthly.

If there is a 3% charge it's generally advisable to pay with a debit card.
Nowadays it's hard to earn more than 3% on your savings, although possible for small balances.
A CC with 0% can be used for paying for making other essential payments where 3% isn't charged.

20aday

I've done this in the past for my car insurance.

Given that some insurance companies charge APRs akin to the likes of the bad-credit card sector the 3% fee is worth it.

ricky_v

grumbler wrote: »

If there is a 3% charge it's generally advisable to pay with a debit card.

Personally I never use my 0% CC on purchases where I get charged CC fees as, like you said, there's other essential purchases which don't charge. Therefore when it comes to renewing the bike insurance (<£100) who do charge a CC fee, I always pay annually with a debit card.

However, if you don't have the cash to pay car insurance annually which can be a 4 figure sum for some people! Then paying with a 0% card with a 3% fee is the most cost effective way.

If the op is very disiplined they can stooz off the 0% card and the interest can go to pay some/most of the fee.