Using credit card for "free" loan.

socratez

I have a c/card with my bank that I barely use and I have a £10k limit, and a current offer of 7% Apr interest and 0% on money  transfers. I have now got another c/card with another provider that has an £11k limit and 0% interest on balance transfers for 24m.

So my plan is to transfer 9k to my bank from the c/card and then move the 9k balance from the first c/card to the second, giving me a 9k loan I pay back over 24m. 

Has anyone done this before? Will it work? Will there be any issues? 

cymruchris

Yes the principle of moving money to a bank account, and then settling that card at the end of its promo period or immediately if the offer (eg 24 months) is good with a balance transfer would work to extend your low cost borrowing - have you looked at the fees for making the transfers? Just calculate the fee on each transfer and see how that adds to the cost of the borrowing - as it won't be free money overall.

socratez

cymruchris said:

Yes the principle of moving money to a bank account, and then settling that card at the end of its promo period or immediately if the offer (eg 24 months) is good with a balance transfer would work to extend your low cost borrowing - have you looked at the fees for making the transfers? Just calculate the fee on each transfer and see how that adds to the cost of the borrowing - as it won't be free money overall.

What additional fees will their be? The recieving card has 24m zero interest for the balance amount, and the leaving card has free money transfers?

[Deleted User]

Does the receiving card have a BT fee?

Fighter1986

Zero interest is separate to balance transfer / money transfer fees. Check with each card provider.

E.g. last year my OH had two money transfer offers on his MBNA card: 0% for 18 months money transfer with 4% few, or 3.9% APR for 36 months money transfer with 0% fee.

It worked out cheapest to take the latter offer with 0% fee and immediately transfer the balance to a Barclaycard with 0% on balance transfers for 24 months with 0.9% fee. 

This was done to pay off an interest-bearing loan he had for his car. 

socratez

Deleted_User said:

Does the receiving card have a BT fee?

No it does not.

kaMelo

0% interest for 24 months with no fee, who is the provider?

porkisnotmeat

The second card doing 0% for 24 months must be charging some sort of fee for this.

You might get a 1.75%-2% -ish loan over 2 years, but it won't be "free."

Possibly cheaper than the headline rates of the lowest loan providers but with a nice fat sting in the tail if your circumstances change.

Sncjw

You sure you haven't got a pirchas card 

Vinknut

socratez said:

Deleted_User said:

Does the receiving card have a BT fee?

No it does not.

You'll need to check that again - it's *highly* unusual for a 0% balance transfer to NOT have a one-off fee associated with it.