Paying my car loan off with a credit card help

Jitterywreck

Wondering if you kind people could enlighten me on my rights here. I had an amazing 0% offer for a card with a healthy balance from Lloyd's. Given the current climate I applied with the view to using the balance to clear my car finance with BMW. Called up today to pay up and told that you aren't able to use credit to clear credit ........ may be a very obvious legal thing but totally news to me. So I now have a lovely card balance with no purpose. I have been thinking to maybe get cash from family and putting their purchases on the card to raise the funds ? But any suggestions greatly appreciated. I have 17 months 0%on purchases and 15 months on BT but with a 2.99% fee which I'd rather avoid paying. Thanks in advance 

MorningcoffeeIV

You'd need a money transfer card to get the money into your current account first. That would carry a higher fee than the BT, but you can't BT it anyway.

Alternatively, yes, you could use the card for purchases and use the card to pay off the loan. But make sure you have an exit plan to clear the card. 

CliveOfIndia

As you've discovered, the vast majority of lenders won't allow you to use a credit card to pay off a loan.  And even if you could, it would be treated as a cash advance, so you wouldn't benefit from the 0% anyway, and you'd also be stung with a cash advance fee and the interest on the cash advance.

I agree, it would seem pointless to pay the 2.99% fee for no reason.  Why not just use the card for everyday purchases (groceries, petrol, whatever you have to buy anyway).  Then put a corresponding amount into a savings account to earn some interest.  When the 17 months are up, use your savings to repay the card, and use the interest you've earned to treat yourself to a nice day out or whatever.

Just check the T&Cs.  Many cards will apply 0% to any purchases made at any time during the promotional period, but there are a few which restrict it to purchases made during the first 3 months or similar.  This is less common now than it used to be - most cards you're fine to spend on for the duration of the promotion.  But just double-check.

Do remember, you will need to make the minimum payment to the card each month - a direct debit is the safest way to do this.

On an ordinary interest-bearing card the advice is always to pay more than the minimum (if you aren't able to clear it every month), since only making the minimum payment can be viewed as an indication of financial hardship.  But if you have a promotional rate, this is flagged as such on your credit file, so only making the minimum payment in this scenario is fine.

born_again

One of the main reasons is cost to finance co for you using your CC to pay, as they will have a hefty % to pay. Also many do not like people using credit to pay for credit.

Plus & this is the biggest one for you. If they had taken the payment. It would have been classed as a cash payment, just like taking cash out of a ATM. Thus attracting a nice fee 5%? for the payment & interest from day one.

Lucky escape for you..

https://www.lloydsbank.com/credit-cards/help-and-guidance/cash-transactions.html

Jitterywreck

Thanks all! Makes perfect sense. We have a cruise booked as a family so plan is to use the CC to pay for that and everyone give me the cash to pay the car loan off! The 0% purchase appears to be for the duration of the 17 months. I'd planned to pay the same amount off as I was paying for the car which would clear it in that time. So glad they didn't take payment, in my head it worked at least 🤣

redux

Look at the offer a bit more closely. There might well be a money transfer option on the card, and you can transfer cash to your bank account, then clear the other loan from there.

For instance recently my Lloyds credit card offered either balance or money transfer, either 0% interest for 15 months with 5% initial fee, or 5.9% for 2 or 3 years with no initial fee

Your offer looks slightly different, but it may well be available for money transfer too.