Credit Card Shuffle, again! and again and again ...

Topher_Bear

Driving home tonight I had a kind of eureka moment.

Could someone tell me if the following is possible, and if so, for how long it might work. Would it adversly effect my credit card rating?

I have two credit cards, both at a standard rate, no more intro offers and no amounts sitting on them with special rates attached.

My main one is at 14.9% and I almost always pay it off each month. I have another at 12.9%, which I used as 0% intro rate a while back, but still has a some amount still on it. Would it be possible to transfer the 12.9% card balance in full to my main 14.9% card, to avoid the interest payment that month and then the following month transfer it back again, thus avoiding interest for another month. Could I keep this up, transferring back and forth each month, paying off a chunk more each time, until its reduced to zero without having to pay any more interest at all?

I am no-where near the credit limit on either card...they just keep pumping it up hoping I might use it one day!!

Thanks

Topher Bear

Milarky

AFAIK all credit cards available now only give interest-free periods against purchases (some don't even have an interest-free period of course!)

There's probably only one credit card left that works like this and treats all transactions exactly alike which is cahoot - and that is no longer offered to new customers. Nationwide credit card could be used for short term BTs like this until 2 years ago (possibly after they noticed more than a few people using it that way!) and Liverpool Victoria I've heard was the same. Even Halifax offered a card on which balance transfers were initially interest-free for a while. But they soon withdrew that one too.

Nice idea (and it can work) but someone's already been there and the CC companies have now caught up with this trick....

Topher_Bear

I don't think I've explained myself properly. I'll try again, now I'm not fighting the shutdown deadline of last night!

I'm talking about ordinary credit cards, with ordinary interest rates, no special deals, no introductary offers.

Let me try setting it out

Statements from month 1

Card A: Outstanding Balance £500
Card B: Outstanding Balance £0

In order to avoid paying any interest on the £500 on Card A I need to pay it off in full, so I Transfer the balance to Card B, thus avoiding interest charges for Month 1

Statement from Month 2

Card A: Outstanding Balance £0
Card B: Outstanding Balance £500

To avoid paying any interest in Month 2 on the £500 on Card B, I pay it off in full by transfering the balance to Card A. And then I'm back to the begining of month one again!

Does that explain my thinking any better?

Could I do this? For how long could I do this? would it effect my credit rating if they found out what i was doing?

I know its a bit crafty, and requires monthly attention, but I want to do it for 4 to 6 months and then I'm clear. I can't apply for a new low deal again, did too many last summer, and now credit is harder to get I know I will get turned down...I'm a contractor with no mortage!

Thanks

Topher Bear

Milarky

No, it's just the same as the first time I'm afraid. Credit cards don't do 'interest-free period' transfers - except for the one I mentioned (no longer available to anyone who hasn't already got it). I bet you five pounds that neither the credit card(s) you have state that the interest free period covers anything other than purchases.

Now if you could make a purchase transaction that wasn't really a purchase - but a cash substitute instead - and this transaction then didn't fall foul of that particular card's rules (such as 'gambling transactions' which many card treat as cash advances and charge accordingly) you'd be half way there. The other half relying on doing the same set of permitted purchases with the second card.

See this post, and follow the link it gives, which describes one method for getting the cash via 'purchases'. The main point to recognise is that relies on quite indirect methods and these will lose you time at each stage if the only benefit is the interest free period - but it can (subject to a card's rules) also attract any cashback available.

Topher_Bear

Aah!

I see what your saying now. That a transfered balance is considered like a cash advance and incures interest from the day it is transferred in (unless of course that rate of interest just happens to be zero, which of course it isn't in that case)

Oh, well. Thought it was too good to be true! I'll just have to pay it down in the usual way!

Thanks

Topher Bear

martwise

Hi, have just seen this thread could you explain the cahoot card BT procedure as i have it with an £8000 limit.

W1zz

Balance Transfer Fees

2.5%-3% per Transfer - Or 30% APR if transfered each month over 12 months @ 2.5% per month.

Milarky

martwise wrote: »

Hi, have just seen this thread could you explain the cahoot card BT procedure as i have it with an £8000 limit.

If you go to login and select 'credit card' the information of how to do a balance transfer is all there. Basically you send a paper statement and enter the amount to transfer on the paying in slip. Timing is awkward because of this (unusual) method for balance transfer requests. Ideally, you want to be able to send off your request just a day or so before the start of a new statement period - to get the maximum time out. But then you've got the other card (presumably at the end of its 0%) with a fixed date which may be a bit off. However you can tweak statement dates every six months if necessary.

The main thing though is to ensure the next full statement balance is paid in time - so a full balance direct debit is a must. You'll find they don't take payment from your current account until one working day later than they say they will.

I've just checked this again and when I went to the statement page and click on the link to view the summary box my heart stopped because it is now saying:

Interest free period "Maximum 46 days for purchases if you pay your balance in full and on time."

Now this definitely used to either include the wording 'balance transfers' too or just say "Maximum 46 days if you pay your balance in full and on time."

However this page http://www.cahoot.com/legal/legal.html#credit

should be taken as the last word - since it is the current terms and conditions and this says (under "Interest")

6.1 We will not charge you any interest if you pay off the full credit card balance shown on your statement by the first payment date after the date of the relevant statement.

And thus makes no mention of the different types of transaction - so they are all still treated the same [fingers crossed].

johnllew

BTs at Cahoot are still treated as purchases and have the normal interest free period. Note that the address to where BT requests should be sent has changed to:

Cahoot Team 3
PO Box 970
Bradford
BD1 9EP

The Lifeboats card (RBS) still treats BTs in the same way. I know of no others (though CapOne still gives int-free periods on "P" cheques).

Milarky

johnllew wrote: »

Note that the address to where BT requests should be sent has changed to:

Cahoot Team 3
PO Box 970
Bradford
BD1 9EP

It's still giving the 'old' address - in Coventry- in the secure area instructions. How recently has this changed? (Might account for the extra day or two in some recent requests I put through)

Thanks

EDIT: (see next) I emailed them and they confirm it has now changed. I've got the same compliments slips too (and it is there as Bradford in 9 point brown text!) but I never looked that closely and carried on using the old one - obviously the requests have been getting through by redirection for a while now. Thanks again

johnllew

Milarky wrote: »

It's still giving the 'old' address - in Coventry- in the secure area instructions. How recently has this changed?

A little while now, I believe. I have a with compliments slip from that section, returning a statement, dated Feb 2007.