0% Card Credit Limits, amount on average or how to find out

menaistrait

I have a Santander Zero that I got years ago for spending abroad and have always paid off in full monthly, I now use it for most my spending, fuel and shopping etc

I need to get a car about 7-10k. Not much cash in savings that isn’t locked away.  Reading the car financing section on MSE it says about 0% cards, I’ve lfilled in the eligibility calculator and it said I’m 100% eligible for most so that’s ok!  What I don’t have is a ‘balance transfer’ which some seem to assume you have, or you need for eligibility for 0% on purchases like the Barclays one, but I’m not in debt so I don’t think this helps me.

I also have no idea on how much I can get, credit limit wise, how does one find this out? Can anyone give me any averages or is it all over?   I’m looking to cover most of the cost of the car to avoid PCP/HP, is this likely? About £4-7k? or is that absurd at 0% ? I have no debts apart from my mortgage.  Monthly income covers all outgoings and I just want to spread the car cost over 2 years instead of paying what I already do into savings.

 As you can tell I’m not in the know about using CCs to any advantage!  So any advice welcome, on the car purchase or how to maximise CCs 0%s without any existing debt.

 Cheers

[Deleted User]

Your limit will be determined by your history, risk and affordability. You'll only be advised upon acceptance in most cases, thought there are one or two that will tell you during application - I believe Nationwide is one.

However, check that your car retailer will accept a card for more than a small deposit - many won't and those that do, are probably charging more to cover it.

Ebe_Scrooge

To add to the above - do you "need" a car for 7-10K, or do you "want" one?  If you need a car and don't have 7-10K in cash to buy it, spending half that amount will get you a perfectly serviceable run-around if you're prepared to do a bit of hunting around.

menaistrait

thanks, I'll check out nationwide and check with the garage where I have seen a decent car.  I'm looking at KIa Approved and assumed they would take card as they are approved dealers (only ever bought private with cash in the past) I assumed they didn't have to charge more as they get their money and my debt is left with the CC provider?  I'm quite good with finances but financING I've just never done. 

Ebe_Scrooge

menaistrait said:

I'm looking at KIa Approved and assumed they would take card as they are approved dealers..... I assumed they didn't have to charge more as they get their money and my debt is left with the CC provider?

Most dealers will refuse to take a card for the full amount (you may find the odd one who will).  The problem is, any time you use a credit card, the vendor gets charged a fee by the credit card company - it's a percentage of the transaction value.  This is actually how card companies make the majority of their income.  Every time you buy your shopping at the supermarket using a credit card, for instance, the supermarket pays a fee to the card issuer.

With a high-value item like a car, the fee the vendor gets charged is not insignificant (as it's a percentage of the transaction value).  In the olden days, most dealers would pass the fee on to the customer, but they're not allowed to do that now.  So most dealers simply refuse to accept a credit card for anything more than a small deposit.

What ZX81 meant about "charging more" was, if the dealer does accept a card, there's a chance they'll inflate the price of the car to cover the credit card fee they'll have to pay.

menaistrait

thanks for explaining. doesn't look like using a CC is going to be possible or allow enough. just asked as was on here as a suggestion, but I can't really see how it would work for anyone!

Brie

I've only once not been able to buy a car with a credit card - and that was with a place that dealt strictly with second hand cars, not a dealer.  VW & Lexus were fine.  

I didn't mention to them I would be using a card while all the negotiations were going on.  A price was agreed and then I let them talk to me about finance - which proved to me they didn't know enough about credit agreements.  I then offered to pay in full with a card.  It's not legal (as I understand it) to charge more if using a card for payment so their choice was to let me pay the whole whack on a card (or two) or not sell me the vehicle.  

And having paid on a card (or two) I then BTd the total to a 0% card with a long time offer and paid it off at my leisure.

Brie

Oh also - on one occasion I knew I didn't have a high enough limit on a card but I'd had it for a number of years and the limit had been steadily increasing.  I called up the card provider and said - I'm planning on buying a card from X for £Y can you up my limit.  And they were happy to because they assumed they'd be raking in large monthly interest payments for a couple of years.

[Deleted User]

Ebe_Scrooge said:

menaistrait said:

I'm looking at KIa Approved and assumed they would take card as they are approved dealers..... I assumed they didn't have to charge more as they get their money and my debt is left with the CC provider?

Most dealers will refuse to take a card for the full amount (you may find the odd one who will).  The problem is, any time you use a credit card, the vendor gets charged a fee by the credit card company - it's a percentage of the transaction value.  This is actually how card companies make the majority of their income.  Every time you buy your shopping at the supermarket using a credit card, for instance, the supermarket pays a fee to the card issuer.

With a high-value item like a car, the fee the vendor gets charged is not insignificant (as it's a percentage of the transaction value).  In the olden days, most dealers would pass the fee on to the customer, but they're not allowed to do that now.  So most dealers simply refuse to accept a credit card for anything more than a small deposit.

What ZX81 meant about "charging more" was, if the dealer does accept a card, there's a chance they'll inflate the price of the car to cover the credit card fee they'll have to pay.

Just FYI, (I believe again?) credit card companies make the majority of their money from customers paying interest/fees. The merchant fees / interchange fees vary from about 30-40% depending on card issuer

Ebe_Scrooge

Deleted_User said:

Ebe_Scrooge said:

menaistrait said:

I'm looking at KIa Approved and assumed they would take card as they are approved dealers..... I assumed they didn't have to charge more as they get their money and my debt is left with the CC provider?

Most dealers will refuse to take a card for the full amount (you may find the odd one who will).  The problem is, any time you use a credit card, the vendor gets charged a fee by the credit card company - it's a percentage of the transaction value.  This is actually how card companies make the majority of their income.  Every time you buy your shopping at the supermarket using a credit card, for instance, the supermarket pays a fee to the card issuer.

With a high-value item like a car, the fee the vendor gets charged is not insignificant (as it's a percentage of the transaction value).  In the olden days, most dealers would pass the fee on to the customer, but they're not allowed to do that now.  So most dealers simply refuse to accept a credit card for anything more than a small deposit.

What ZX81 meant about "charging more" was, if the dealer does accept a card, there's a chance they'll inflate the price of the car to cover the credit card fee they'll have to pay.

Just FYI, (I believe again?) credit card companies make the majority of their money from customers paying interest/fees. The merchant fees / interchange fees vary from about 30-40% depending on card issuer

Maybe - although that is an American site you've linked to, so it may be different over there.  I always understood that it was merchant fees that made up the bulk of their income, with customer interest representing a smaller (though certainly not insignificant) proportion.  If they relied heavily on customer interest, surely those of us that always pay in full without fail would find it somewhat harder to get new cards?

Anyhow, I have no wish to argue over that point, I may well have got the wrong end of the stick - if so then I apologise.  But in terms of the specific question in this thread, the point that merchant fees mean many car dealers won't accept CC payments for large amounts is still valid.

I know that Brie says they've rarely had a credit card not accepted - the opposite is true for me, I've never found a dealer that would accept a credit card (apart from a deposit).  Having said that, I always buy older second-hand cars, so maybe the margins are lower on those than if you're spending £10K and upwards?  No idea, just guessing there.

Brie

Ebe_Scrooge said:

I know that Brie says they've rarely had a credit card not accepted - the opposite is true for me, I've never found a dealer that would accept a credit card (apart from a deposit).  Having said that, I always buy older second-hand cars, so maybe the margins are lower on those than if you're spending £10K and upwards?  No idea, just guessing there.

It seems the less you pay for the vehicle the more they want something closer to actual cash.  So the ancient Honda from a back street place wanted a very small deposit and then wanted the rest of the £3k by transfer before I could have the keys.  And they transferred money back to me when I sold the car back to them 3 years later.    The VW was about £6k and the Lexus and Audi were £17k & £22K respectively and were all on credit cards.  So maybe it's more  a garage versus dealership thing?