Skycard 2.99% - stooze @ 6.3%

Non tax payer. £9000 available via promotional cheque on 0% until 1st May 2008 with 2.99% fee.

Put in ICICI account @ 6.3%. Any reason why this wouldn't be worth it?

I'm not good at working out the interest figures etc but face value it seems ok?


  • MilarkyMilarky Forumite
    6.3K Posts
    Part of the Furniture 1,000 Posts Photogenic
    1st May is not a full year - only about 10 months. So when you look at the fee as a percentage ('2.99') it's impact is a bit higher.

    The easy part is to see how much you gain from ICICI - because that is a true interest rate: 6.3% gross - about 5.04% for a basic rate taxpayer [3.78% for higher rate taxpayer]

    Min payments on the card also mean that you have less borrowed (and therefore stoozed) on average than you initially borrow. A rough rule of thumb: If Sky asks for 2.25% per month they will ask for 9 (number of months less one) of these during to the promotion. On average you will have given them HALF of these throughout the promotion. So that's your way of estimating things: 2.25% x 9 / 2 or about 10% away

    So, your average borrowed sum is 90% of what you start with (100% - 10%)

    -therefore add 10% to the fee and it becomes about '3.3%' (of what you borrow)

    And this fee must be covered over 10 months and not 12

    -therefore multiply this fee by 12 and divide by 10 (or multiply by 1.2 - the same thing) and it now becomes about '4%' (actually 3.96 )

    So a fee of '2.99' is actually 4% pa and you make about 1% as a basic rate taxpayer. (Not much but then I'd still do it for 1% of the amount borrowed)
    ''non tax payer..''

    Yes, of course this makes money (and sense) - about 2.4% of the amount borrowed
    .....under construction....
  • YorkshireBoyYorkshireBoy Forumite
    31.5K Posts
    Part of the Furniture 10,000 Posts Name Dropper
    zebidee1 wrote: »
    ...but face value it seems ok?
    Around £120 profit (reduced to around £40 for a tax payer).
  • sickersicker Forumite
    1.4K Posts
    I would go for it too, paying the monthly re-payments from income thus reducing amount to be paid back at end of April (thus saving) and gaining the interest from ICICI. I am already involved in the same scenario.

  • zebidee1zebidee1 Forumite
    991 Posts
    Thank you all. I thought it was worth doing but just wanted to get other's opinions/advice.

    (Like John above me, the monthly repayments will be coming out of our monthly income which will help the savings pot.)
  • ajaxgeezerajaxgeezer Forumite
    2.5K Posts
    zebidee1 wrote: »
    (Like John above me, the monthly repayments will be coming out of our monthly income which will help the savings pot.)

    ....hmmm, does this concept really exist? If it's coming out of income then it's money which could have been saved anyway, meaning it is effectively coming out of the savings money. Granted there's the 3 days grace it takes to reach the savings account (if applicable), but that's the only tiny benefit.
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