Loan vs Creditcard (Barclays)

Lukealthomas

So I have a question in regards to loans vs credit cards...

Me and my wife currently have 2 loans totalling 17,000, we are repaying then fine, and will be finished with them in about 30 months. Both loans are with Barclays.

Barclays keep sending me data and adverts telling me to move to a barclaycard, were I can get 0% interest if I pay a 1.75% fee for 28months....

Doing my math I would save 700-800 if I moved to a Barclaycard, and Barclays would loose out on about £1000 I wanted to ask why they as a company would be happy and would be encouraging me to move to a barclaycard?

Am I missing a trick?

Ebe_Scrooge

You'll probably find that what you're being offered is a balance transfer card - where you transfer a balance from a different credit card to Barclaycard.

Where you could make a saving is by getting a money-transfer card - this puts money into your bank account, and debits your credit card. You couldn't use an ordinary balance-transfer card to pay off a loan.

Lukealthomas

Okay that makes sense, but why would Barclays offer this if they potentially will lose out if I got it? Is there a catch do you think?

[Deleted User]

Lukealthomas wrote: »

Okay that makes sense, but why would Barclays offer this if they potentially will lose out if I got it? Is there a catch do you think?

What are they losing out on and where?

shiny76

!!! wrote: »

What are they losing out on and where?

Presumably the interest on the loan, compared to switching to the credit card offer.

Ebe_Scrooge

Lukealthomas wrote: »

Okay that makes sense, but why would Barclays offer this if they potentially will lose out if I got it? Is there a catch do you think?

They're not losing much. First, they make the balance-transfer fee off you. Second, if you don't repay the card at the end of the promotional period, they'll charge you interest on the outstanding balance. Third, they hope you'll keep using the card as a normal credit card after the promotion, and make money from that in the usual way (fees and interest).

surreysaver

Ebe_Scrooge wrote: »

You'll probably find that what you're being offered is a balance transfer card - where you transfer a balance from a different credit card to Barclaycard.

Where you could make a saving is by getting a money-transfer card - this puts money into your bank account, and debits your credit card. You couldn't use an ordinary balance-transfer card to pay off a loan.

This could be a money transfer offer - I keep getting a letter every month from Barclays offering a Balance Transfer and a Money Transfer, same fee - but the Money Transfer is normally for a shorter period.

Lukealthomas

This all is making sense now Thankyou Guys!

I think debate changing to a money transfer depending on how long the 0% interest lasts for.

Thankyou all

Luke