Balance Transfer Advice Please

DFWJane

Hello, I would be grateful for some balance transfer advice.

My DH has been offered a good 0% deal which he would like to use to pay the car loan. They originally issued CC cheques but subsequently wrote saying a longer term would be available soon so we held out for that. Now the cheques are invalid and they say we can only transfer to another card, not the loan.

Is there any way round this? I was wondering if he could make a transfer to his debit card and then pay the loan from that.

Thanks in anticipation!

Moggles_2

Transferring a loan to a credit card is not straightforward. Only a few rather special credit cards have this capability.

A card issued by MBNA (e.g. Alliance & Leicester, MBNA itself, Sony, Virgin) Egg Visa or the Post Office card, will allow you to transfer an overdraft, in other words, transfer cash from the credit card to your current account. From there you can pay off the loan

Alternatively, you could use Egg Money (not to be confused with Egg Visa) in conjunction with DH's 0% balance transfer deal

Mint periodically issues credit card cheques, which can be paid directly into your current account

Moggles_2

The risk in paying off a loan this way is that you can't be sure of another 0% credit card offer with a sufficient credit limit in X months time when your current 0% deal ends and the interest rate jumps to anything from 15.9% to 27.9% APR or higher :eek:

If you will have savings to pay off the 0% card, that's great. Always bear in mind though, the reason the card company can afford to lend you money at 0% for X months is because, more often than not, customers do not clear their debt and end up paying extortionate interest when the interest-free period ends. This is the main way lenders claw back the cost of these promotions.

Also, you'll need to factor in the balance transfer fees and check the loan Ts & C's. Some providers charge an early repayment penalty if the loan is settled in full before the scheduled date.

DFWJane

Thanks for your replies.

Had we used the CC cheques we would not have had this problem. There are no redemption penalties on the loan but it has a high apr so we may just get a cheaper loan. Would have been nice to balance transfer it though as we would have made money even with the fee.