Paying off car loan with credit card?

SevenOfWine

Hi All,

Would appreciate your view - oh wise ones!

I have a balance of about £12k on my RCI car loan with an interest rate of 11.90%. I want to pay it off with a 0% credit card (it would reduce the term and reduce the balance by £2k), but I see they won't accept settlement with a credit card. I have recently applied for a 0% balance transfer credit card which is in progress and has a nil balance, and I also have an Amex with nil balance - but a high interest rate. 

Is there some trick to this? Or am I going to have to find a lower cost loan to pay it off?

Anyone have any suggestions for me, please?

Ebe_Scrooge

You can't usually pay off a loan with a credit card - either by doing a "purchase" or a "balance transfer".  One option might be a money-transfer card - though you may struggle to find one that'll give you a high enough limit.  And if you did manage to do this, you must remember that you'll have to pay off the card in full when the promotional period ends, otherwise any remaining balance will start attracting interest at their standard APR, which could very well be a lot more than 11.9%

Other than that, a cheaper loan may be worth investigating.  But do bear in mind, when the lender does their affordability checks, they'll assess you as potentially having a £24k debt - £12K on your existing car loan, and £12k on your new loan.  They have no way of knowing whether you'll use the new loan to pay off the old one, or whether you'll go down to Cheltenham and put the lot on "Lame Larry" in the 12:30.  So they have to take the worst-case view and assume your total debts would be £24k if they decided to lend to you.  But there's no harm in making an application and seeing what the result is.

TadleyBaggie

RCI wouldn't even take a debit card to pay off my last PCP, they would only accept a bank transfer.

Alex9384

Better to apply for a 0% Purchase card and use it for all purchases. The money you save by doing that, can be used to pay off the car loan.

Nebulous2

Can you draw cash from your Amex, fee-free, despite the interest rate? 

If so you could wait until you get the new card, withdraw cash from the Amex, then balance transfer the debt to the new card.

It carries some risk, if for some reason the BT doesn't go through, and a money transfer card would have been more straightforward.

SevenOfWine

Nebulous2 said:

Can you draw cash from your Amex, fee-free, despite the interest rate? 

If so you could wait until you get the new card, withdraw cash from the Amex, then balance transfer the debt to the new card.

It carries some risk, if for some reason the BT doesn't go through, and a money transfer card would have been more straightforward.

Unfortunately not 

Alex9384

Nebulous2 said:

If so you could wait until you get the new card, withdraw cash from the Amex, then balance transfer the debt to the new card.

It carries some risk, if for some reason the BT doesn't go through, and a money transfer card would have been more straightforward.

I'm not sure if anyone managed to do balance transfer from Amex. Their cards have 15 digits instead of 16 like Visa and MC, so many providers (if not all) have problem with that since their systems don't accept 15 digit numbers.

[Deleted User]

Alex9384 said:

Nebulous2 said:

If so you could wait until you get the new card, withdraw cash from the Amex, then balance transfer the debt to the new card.

It carries some risk, if for some reason the BT doesn't go through, and a money transfer card would have been more straightforward.

I'm not sure if anyone managed to do balance transfer from Amex. Their cards have 15 digits instead of 16 like Visa and MC, so many providers (if not all) have problem with that since their systems don't accept 15 digit numbers.

The normal process is to do it via the bank on the phone as it's not going to work otherwise. People do them all the time, forum has plenty of evidence of this

Alex9384

Deleted_User said:

The normal process is to do it via the bank on the phone as it's not going to work otherwise. People do them all the time, forum has plenty of evidence of this

Thanks. So they spend a big sum on Amex to earn rewards/cashback and then immediately BT it to another card?
And it doesn't matter what kind of debt is on the original card? I mean, cash advance, money transfer or just regular purchases, all of it can be transferred the same way?

[Deleted User]

A BT is just you paying off your card, they don't care what you have spent on the card - you're just asking credit card company B to pay credit card company A x amount of money, no different from asking your bank to pay the credit card company in terms of how the payment is seen

SevenOfWine

Deleted_User said:

A BT is just you paying off your card, they don't care what you have spent on the card - you're just asking credit card company B to pay credit card company A x amount of money, no different from asking your bank to pay the credit card company in terms of how the payment is seen

Ok, so let me make sure I have this right. Can I pay the RCI balance to their bank account with an AMEX card, over the phone? That seems opposite to my understanding. Or are you saying that you can pay with other credit cards, not AMEX in particular?