Money credit card as a loan ?

harvsl

Hi 
I see on mse that there are now money back credit cards which means essentially there is transfer of the credit card balance into your account and still  retain the 0% interest. These are new to me ! I have had plenty of normal cards in the past. I have one active one  at present which is cleared but has a limit of £8k. Basically I would now like to take 10k on one of these cards to use towards my interest only mortgage. I'm in  negative equity but want to get the loan to value down to be able to remortgage. Has anyone had any experience of these ? I have been pre approved on mse for a virgin one but can you find out how much they will offer ? I have a good credit rating with no debt apart from mortgage. I dont want to affect my credit score by applying for one and then only get 1 or 2k. Sorry for the ramble! Really just looking for anyone who has been successful in getting one of these cards,  and if so how much did you get approved for ? Is 10k unlikely ? Thanks so much! 

[Deleted User]

They're money transfer cards, rather than money back.

If you're accepted, you'll be told your limit on acceptance.  Your credit score isn't used in lending and if you're declined, all that will show is a search, so don't worry if the score plummets. 

Anyone else's limits won't be relevant to your application.  Many people get vastly more than 10k, some considerably less.  You'll need a good credit history to be accepted.

harvsl

Thank you zx81! Can I ask one more q? I have been saving like mad and am going to put in a lump sum to my mortgage of 13k. Do you think it is better to wait until I do that before I make the credit card application? Many thanks

[Deleted User]

Only if your affordability is very very tight.

But might it not be better to use that 13k instead of paying to get a money transfer?  I'd have thought your mortgage rate is unlikely to be greater than the fee you'll pay for the transfer.

harvsl

Can I also ask if you think I should close my existing credit card before I apply ? Thanks- sorry for all questions!

[Deleted User]

No.  You only have the one, so are already potentially on the higher risk end of things.

harvsl

Thanks! My mortgage rate is 4.99% (at one point was 6%) bought just before the crash 🙄 

[Deleted User]

Depending on your pay back period, it looks like it would be cheaper to not overpay the mortgage and use the cash.

harvsl

Sorry zx81 I'm being very stupid. What do you mean ? To give background I'm on an interest only mortgage, its sitting at 125k, value is 100k. I intend to pay in 13k savings, and hopefully 10k from the credit card on 0% interest (with a £400 fee) and then a few months of overpaying 1500 a month. Hopefully to get down to an amount where I can remortgage to a better rate, although i know the credit card might affect that. I honestly welcome any advice you can give as I dont want to waste any more money on interest. Many thanks !! 

[Deleted User]

You need to calculate the interest on 10k of your mortgage over the same period as the card promo.

For example, if you have to repay the card with a year, that equates to an 8% APR, much more than your mortgage.

You'd start to win close to the two year mark, but it seems a lot of effort for a few quid.

harvsl

Ok thanks