Alternative to money transfer - legality

6400

I have considered making a  money transfer from credit card to current account but there’s a hefty 23% interest on doing so. I sell digital music through a third party on a pay-what-you-want basis. If I bought my own music for the amount I wished to transfer, the % the 3rd party take would be considerably lower than 23%… but it seems potentially illegal to do so. I’m sure there are wiser things to do in this scenario but thought I’d ask the question!

jay1804

A new credit card or Loan. Depending on what you need the money for?

jonesey1985

Buying your own products isn't illegal, and it's also highly unlikely to be against your card's terms and conditions.

It will cost you as a merchant and unless you have a cheap purchase rate on your card, probably cost you 23% APR until you settle the debt, so probably not a great idea...

philip4567

Many years ago, I ran a travel agency. We had an American Express card.

When custormers paid for a full-fare, airline ticket by cash, we would buy the ticket from the airline using the Amex card and later get out commissin back from the airline. We racked up thousands of Amex Reward Miles.

We didn't realise this was a problem, until one day we got a letter from Amex saying that it was against the terms and conditions, for a business to buy supplies for resale using the card.

Ergates

It doesn't sound like the OP was buying them for resale though.

OP:  It doesn't sound illegal.  You should check through the terms and conditions of any online shop services, or business etc you might have a contract with in relation to your business.  It could, potentially, be against their terms of service (I don't know why - artificially inflating your sales revenue or something).  Probably isn't, but worth a look.

paul_c123

You're not comparing similar things though.

The <23% sale commission fee is gone, as soon as you do your buying-own-music transaction.

The 23% rate for the money transfer is an APR, ie ANNUAL percentage rate.

If you coincidentally were planning to pay the exact amount of money back in exactly a year's time, then you could compare them, but that won't be the case due to the min payment requirements anyway. So you should look at the 23% MT rate alongside the intended schedule of repayment (or are you planning to revolve the debt, at the max time later?) For example if you had another CC, you could do the MT, that 23% rate is accrued for only a few days, then a balance transfer is done hopefully at a much better rate, and it beats your paying sales commission alternate easily.