New kitchen - loan or credit card?

timg147

Hi all, we are having a new kitchen fitted at the beginning of August and need to borrow circa £6.5k. I'm just wondering what people think the best option is. 
I have a couple of credit cards I could use then balance transfer to a Barclaycard at 1.9% fee or the alternative is a loan at 3.8%. Logic would say the lower Apr but am I missing something? 

Sandtree

Is the Barclaycard 0% APR?  Will you be able to pay it off in the timescales of the promotion if yes?

You would certainly want to pay something on a credit card just to get the Section 75 protection in case anything goes wrong (our proposed kitchen company went bust in February - thankfully before we paid them). After that it makes sense to consider the APR and if its a promotional rate your ability to pay it off in the timescales.

timg147

Hi , yes it's 0% for 20 months (I think). Probably not able to pay off in the timescale but could always revisit then and see what offers are available then. 

[Deleted User]

You might be safer with the loan. You'll pay around the same over a couple of years, as the fee is charged on the full balance, whereas the APR is on the  declining sum. 

timg147

What about buying on the credit card to get the section 75 protection and then pay off with a loan

Malkytheheed

Save up the money then buy it when you can afford it? Then you wont pay any interest? 

Sandtree

timg147 said:

Hi , yes it's 0% for 20 months (I think). Probably not able to pay off in the timescale but could always revisit then and see what offers are available then. 

All depends on how much you think you will have left to pay and how confident you are of getting another deal then. If its a tiny amount leftover and you are highly confident then its probably a good plan... obviously it all comes unstuck if you don't pay the debt down and your situation changes so no more deals/loans then you have the debt on 19.9% or so

CRISPIANNE3

timg147 said:

Hi all, we are having a new kitchen fitted at the beginning of August and need to borrow circa £6.5k. I'm just wondering what people think the best option is. 
I have a couple of credit cards I could use then balance transfer to a Barclaycard at 1.9% fee or the alternative is a loan at 3.8%. Logic would say the lower Apr but am I missing something? 

We financed our kitchen by courtesy of MBNA. We had the zero percent on purchases for 20 months provided they were made within the first 60 days.  However we do have savings to clear the debt when the time comes. We never like to over commit ourselves. 

MallyGirl

timg147 said:

What about buying on the credit card to get the section 75 protection and then pay off with a loan

have you checked that they take credit cards?

timg147

Yes , we paid the deposit on credit card. 

MinuteNoodles

timg147 said:

I have a couple of credit cards I could use then balance transfer to a Barclaycard at 1.9% fee or the alternative is a loan at 3.8%. Logic would say the lower Apr but am I missing something? 

Nope. You'll pay less interest on the Barclaycard transfer. 
£6500 BT at 1.9%= £123.50 interest.
£6500 @ 3.8% over 3 years = £381.10 interest
£6500 @ 3.8% over 5 years = £635.97 interest.
It only falls to bits if you spend on the BT card and/or don't clear the BT amount by the end of the 0% deal.