Money transfer offer from credit card

batches66

Hi - A quick question. I have a credit card that is offering me 0% interest till January 2017 (1.9% fee) for a money transfer. I need some money to pay for some work to my house and was going to use my bank overdraft.
Is going for the money transfer option a better way and is this like a payday loan (that would effect your credit score)? or just like a balance transfer.
Thanks if anyone could answer.

[Deleted User]

It's like a BT.

You'll need to compare the fee with your overdraft costs.

batches66

Thanks - the fee is 1.9% on card but am hoping I will be able to pay it back within 2 months. Not sure what overdraft fee would be - will look into that.

I know Payday loans affect your credit history so I wasn't too sure if it was the same with a money transfer. I have the credit card already so for the amount of less than £2000 I may use the money transfer.

MABLE

batches66 wrote: »

Thanks - the fee is 1.9% on card but am hoping I will be able to pay it back within 2 months. Not sure what overdraft fee would be - will look into that.

I know Payday loans affect your credit history so I wasn't too sure if it was the same with a money transfer. I have the credit card already so for the amount of less than £2000 I may use the money transfer.

Can seriously hit your credit file taking out a payday loan. My advice is don"t.

jonesMUFCforever

If you are being offered a money transfer by your credit card provider you do NOT need a payday loan - they wil adversley affect your credit files even if paid back without any trouble.

£2000 MT would cost you £38,
Overdraft of £2k for 2 months - od fee say £6 per month so £12 and interest of about £30 per month so £60 --- £72 in total assuming you clear it all in 2 months and that your bank account was running in credit before and after the transfer.

JimmyTheWig

batches66 wrote: »

Thanks - the fee is 1.9% on card but am hoping I will be able to pay it back within 2 months. Not sure what overdraft fee would be - will look into that.

I make that about 15% APR.
Which is probably cheaper than your overdraft.
And many, many times better than a payday loan.

Obviously waiting two months and then paying outright would be cheaper.

Doctor_Duke

The Money Transfer offer at 1.9% sounds like a no brainier to me but I'd would maximise the period of the offer to get best value from the fee.

batches66

Thanks - I won't be taking out a Payday loan

batches66

Thanks to all above. Definately not taking a Payday loan. Just wanted to make sure the money transfer didnt affect my credit history.

I will take the money transfer instead of using my overdraft and above it is half the price and yes I can have it over a longer period if needed.

Cheers for your comments and for confirming what I thought was the best option

Tony147

Also,be aware - read the terms and conditions. I used a Barclaycard Money Transfer and didn't realise "Until you repay your transferred balance in full, you will incur interest on all your purchases at your standard purchase rate. This applies even if you repay your monthly spend in full each month." meant that I will be charged interest on any purchases FROM THE DATE OF PURCHASE until fully paid. Even if you do as I did and pay off your purchases in full plus something off the transfer. It may not seem much, but it will depend on how much you spend on average. I'm thinking about just not using the card until I've paid off the transfer amount (before the 0% offer ends).

Don't get me wrong, it's still a good option for a cheap short term loan.

redpete

Deleted_User wrote: »

It's like a BT.

I'm not sure about that. A money transfer will increase your total amount of debt as you are effectively borrowing more money, a balance transfer will leave it the same (you are just moving debt between two lenders). But if you are comparing an overdraft that will cost you quite a lot in charges and fees with a money transfer which will cost you a small amount in fees it seems a straightforward decision.

(Although a money transfer is time-limited with a fixed expiry, an overdraft is not time-limited but could be withdrawn at any time, it might be easier to get an agreed overdraft (but it might not).)