Which card should I use??

fharkness

Hi all,
I'm going on holiday for 6 months and I want to borrow £1000 for it. However, i really have no idea what the cheapest way of doing this would be. I've never used a credit card so all of the terminology is very confusing to me. I want to be able to borrow the £1000 without having to pay much of it back until june ish of next year when i start a new job.
Does anyone know what the cheapest way of doing this would be without having to pay much back during the holiday?

I am not a home owner and do not have a very good credit rating.

Any help would be greatly appreciated.
Cheers,
Felix

Bokkens

Welcome to MSE.
Firstly read Martin's Credit card articles so you are aware of what is going to happen with your money.
Read about card tarting and the credit card shuffle and see which is going to apply to you.
Make sure you are on the voters register(electoral register) with your council as credit card companies like to know where you are living before they give you credit.
You should be looking to improve your relationship with your bank as they know you best they are likely to give you the credit you want before any other company.
MBNA(Virgin,Alliance and Leicester) give good credit limits and only require a minimum payment each month in the order of £5 while their 0% offers are applied to their cards.
You should be looking at credit cards that are offering 0% interest for 6mths,9mths or 12mths or longer.
When this offer ends you will need to move the remaining debt to a new card so that you don't pay any interest.
This system is better than accepting a loan from your bank as you don't pay any interest during the 0% period where as the loan from the bank would be charging you about 7% or more for the loan of the money and probably want you to pay it back over three years. S0 £1600 + 7% =£1712-ish.
Hopefully that will give you enought to get started with.
Any problems post here again .

fharkness

Thanks for your reply. that helps alot.

I think you're right about getting a 0% on purchases card. However, do they normally require some kind of payment for the service?

For example, if I took the Halifax One or HSBC card with 0% 12months on purchases. Spent £1000 on it and then paid it back in full after 11 months would it have cost me anything?

Cheers for your time,
Felix

lisyloo

Spent £1000 on it and then paid it back in full after 11 months would it have cost me anything?

I don't think this costs you anything for purchases.
For balance transfers there are usually fees.

Word of warning - be careful that this doesn't make you start spending more and living beyond your means.

Most people who've got into a spiral of debt have simply lived a little beyond their means and then the interest on the debt does the rest to get them into a mess. Use it merely as a tool to manage your finances.

I have heard people who've got a credit card treat it as though they've received £3K in the post (and some have even said words to that effect).
It does NOT mean you have more money, you still need to pay for everything, it's simply a tool. That sounds "bleedin obvious" but a lot of people do get into bad habits.

thumshie

Appart from the minimum payment each month, their would be no extra fee/charge..

Remember if you miss one of these payments they often remove the 0% offer and you'll be charged at normal apr..

Bokkens

as you will be going away you will need to set up a method of paying the full amount spent each month this is normally done by using the direct debit system go into your bank and arrange it well in advance of your trip.