Way to keep balance on 0% for longer

donnaroma67

Hi everyone,
I currently have a card balance of £2k on 0% interest until November that I know I won't be able to fully pay off before then. The lender is now offering me a money transfer offer at 0% until next August. 
Would it be plausible for me to use my overdraft to temporarily pay off the balance and then money transfer it straight back, therefore giving me another 12 months to clear the balance interest free?
I'm unlikely to be eligible for another good balance transfer card so I'd just like to make the most of what I've been offered.

Can't see anything that would stop me doing this but I wanted to ask for some advice to make sure I'm not missing something! Opinions appreciated, thank you.

onlyfoolsandparking

Yes, it is plausible and nothing wrong with saving interest, just remember to factor in the MT fee, usually 3-5%.

[Deleted User]

The money transfer is just a transfer of funds into the account, there isn't any reason to use your OD to pay off the card assuming there is sufficient balance on the card to do enough of a MT to cover your BT

donnaroma67

Unfortunately there isn't enough credit left on the card for me to do the money transfer first, and I don't have the cash spare, so briefly dipping into my overdraft to pay it before transferring it straight back would be my only option. 

I will take into account the money transfer fee and overdraft charge, thanks for mentioning!

Thank you both for taking the time to reply 

[Deleted User]

You might be able to game it if you do the numbers vs an overdraft charges e.g. MT £1000, pay off £1000 on card, MT another £1000 etc - would depend on the fees you'd incur each time of course

phillw

My only worry would be if they reduced your credit limit as soon as you clear the balance, or withdrew the money transfer & you're left with the money in your overdraft.

It's probably ok & if the overdraft and credit card are similar interest rates then you're no worse off in any event.

onlyfoolsandparking

donnaroma67 said:

Unfortunately there isn't enough credit left on the card for me to do the money transfer first, and I don't have the cash spare, so briefly dipping into my overdraft to pay it before transferring it straight back would be my only option. 

I will take into account the money transfer fee and overdraft charge, thanks for mentioning!

Thank you both for taking the time to reply 

I thought that might be the case so back to your original plan it is then. Pay off all the balance on your card, give it a few days to 'clear' (they say 24hrs or next working day on transfers but I've always found it wiser to just give it a few days to be on the safe side) then take the MT offer and that will pay off your OD, job done. Nothing wrong with doing this and it gives you what you want/need.

donnaroma67

I think I get what you mean Farfetch but both the overdraft and money transfer fees are just a fixed interest charge with no other fees so it'll cost me the same however many transactions I do it in.

I hadn't considered them reducing the credit limit without any advance warning, don't know how common that is...? I've always managed my account well and the money transfer offer has a fixed end date so I'm not sure they'd withdraw it sooner. I've checked with smaller amounts and whatever I pay off the card becomes part of my available balance to transfer back the same day.

My overdraft interest rate is certainly less than I'd be paying on the credit card when my 0% deal comes to an end. It wouldn't be ideal but not the end of the world.

onlyfoolsandparking

donnaroma67 said:

I think I get what you mean Farfetch but both the overdraft and money transfer fees are just a fixed interest charge with no other fees so it'll cost me the same however many transactions I do it in.

I hadn't considered them reducing the credit limit without any advance warning, don't know how common that is...? I've always managed my account well and the money transfer offer has a fixed end date so I'm not sure they'd withdraw it sooner. I've checked with smaller amounts and whatever I pay off the card becomes part of my available balance to transfer back the same day.

My overdraft interest rate is certainly less than I'd be paying on the credit card when my 0% deal comes to an end. It wouldn't be ideal but not the end of the world.

Are you sure about the interest rates? I would be surprised if your correct as majority of OD charges are circa 40% and majority of 'mainstream' credit cards are circa 20%

Regarding reducing credit limits, yes it happens (Barclaycard did it to me and many others back in May) but it's rare if your servicing your account in line with the T's & C's. Paying the debt off any way you can as quickly as you can is all anybody can do in reality. 

donnaroma67

onlyfoolsandparking said:

Are you sure about the interest rates? I would be surprised if your correct as majority of OD charges are circa 40% and majority of 'mainstream' credit cards are circa 20%

Regarding reducing credit limits, yes it happens (Barclaycard did it to me and many others back in May) but it's rare if your servicing your account in line with the T's & C's. Paying the debt off any way you can as quickly as you can is all anybody can do in reality. 

Oh yeah definitely, my overdraft with Starling Bank has a 15% rate. I'm not completely certain about my card interest rate as it's been at 0% for so long and I don't use it for purchases but I know it's over 20%.

I wasn't aware they could reduce the credit limit with no notice, thanks for the heads up. 

daivid

donnaroma67 said:

Hi everyone,
I currently have a card balance of £2k on 0% interest until November that I know I won't be able to fully pay off before then. The lender is now offering me a money transfer offer at 0% until next August. 
Would it be plausible for me to use my overdraft to temporarily pay off the balance and then money transfer it straight back, therefore giving me another 12 months to clear the balance interest free?
I'm unlikely to be eligible for another good balance transfer card so I'd just like to make the most of what I've been offered.

Can't see anything that would stop me doing this but I wanted to ask for some advice to make sure I'm not missing something! Opinions appreciated, thank you.

Could you get a 0% spending card? Then use that for your regular spending (and only for regular spending!) then pay the minimum payment + £1 and use the surplus to pay off the old card. Once the old card is payed off, up your payments to clear the spending card before its 0% ends.