0% credit cards

Beginner_Budgeter

Hi all!

Long story short, I have a debt with Creation finance and was looking to try to transfer it onto a 0% balance transfer/purchase credit card to reduce the monthly payments. I'm currently able to afford the payments but by my calculations, I'm able to reduce it by around £80 per month if I'm able to move the debt.

My question is, would I be able to use a balance transfer/0% purchase credit card to pay off the debt with Creation finance...from what I gather, they accept credit cards as payment but I'm not sure what category it would fall under, a balance transfer or a purchase?

Appreciate the help in advance!

daivid

I would expect it to be a payment - if you input credit card details on creation finance's website/app then that is a payment. For a balance transfer you go to your credit card and ask them to take the debt from another credit account.

th081

Do you have another card with a 0% BT offer. And yes if you do it falls under a payment 

Beginner_Budgeter

th081 said:

Do you have another card with a 0% BT offer. And yes if you do it falls under a payment 

I'm currently looking at an option with Barclays which gives both 22 months 0% for either a balance transfer or purchase. I have seen an option which I'm also pre approved for which is 0% purchase for 30 months so I was unsure which would've been the best option to go for

grumbler

You cannot pay off one CC with another CC. So, you need a CC offering 0% on balance transfers. Expect to pay about 3% for the BT if you manage to get such card.
Cards offering 0% on purchases are easier to get, but for you the only way of taking advantage of it is to use it for your essential spending and to direct the 'saved' money towards your old CC.
MSE article: 

• Best 0% credit cards

Beginner_Budgeter

So just to confirm, even though it is not a physical card it would still be classed as a credit card. So using the card and inputting the information on the app/their website would not work? They do state that you can pay through a bank transfer and give their sort code and account number on their website, as well as saying they accept Mastercard and Visa credit cards as a form of payment. I would post links to the correct website pages but it won't allow me yet.

Beginner_Budgeter

grumbler said:

You cannot pay off one CC with another CC. So, you need a CC offering 0% on balance transfers. Expect to pay about 3% for the BT if you manage to get such card.
Cards offering 0% on purchases are easier to get, but for you the only way of taking advantage of it is to use it for your essential spending and to direct the 'saved' money towards your old CC.

So just to confirm, even though it is not a physical card it would still be classed as a credit card. So using the card and inputting the information on the app/their website would not work? They do state that you can pay through a bank transfer and give their sort code and account number on their website, as well as saying they accept Mastercard and Visa credit cards as a form of payment. I would post links to the correct website pages but it won't allow me yet.

CliveOfIndia

One thing to be careful of.  If you do attempt to pay off the debt by using a 0% purchase credit card, you may well find that the transaction is classed as a cash advance rather than a purchase.  As such, it wouldn't qualify for the 0% rate, you'd likely be charged interest on it, and probably a cash advance fee as well.

If you decide to go for the balance transfer option, check whether this would be allowed - is the debt with Creation a credit card or a loan?  If it's a credit card then you'll probably be fine, but if it's a personal loan you can't usually do a balance transfer to pay it off.

I'm not saying either of these things are for certain - just make sure you read (and understand!) the T&Cs of your 0% card very carefully.

Beginner_Budgeter

CliveOfIndia said:

One thing to be careful of.  If you do attempt to pay off the debt by using a 0% purchase credit card, you may well find that the transaction is classed as a cash advance rather than a purchase.  As such, it wouldn't qualify for the 0% rate, you'd likely be charged interest on it, and probably a cash advance fee as well.

If you decide to go for the balance transfer option, check whether this would be allowed - is the debt with Creation a credit card or a loan?  If it's a credit card then you'll probably be fine, but if it's a personal loan you can't usually do a balance transfer to pay it off.

I'm not saying either of these things are for certain - just make sure you read (and understand!) the T&Cs of your 0% card very carefully.

The debt is with Creation via a Currys YourPlan account so I'm not sure what it would be classified as.

This is the reason I've been a little bit hesitant in terms of applying for a card because I'm not sure what banner it would be under and the last thing I want to do is create a worse situation financially.

CliveOfIndia

Beginner_Budgeter said:

CliveOfIndia said:

One thing to be careful of.  If you do attempt to pay off the debt by using a 0% purchase credit card, you may well find that the transaction is classed as a cash advance rather than a purchase.  As such, it wouldn't qualify for the 0% rate, you'd likely be charged interest on it, and probably a cash advance fee as well.

If you decide to go for the balance transfer option, check whether this would be allowed - is the debt with Creation a credit card or a loan?  If it's a credit card then you'll probably be fine, but if it's a personal loan you can't usually do a balance transfer to pay it off.

I'm not saying either of these things are for certain - just make sure you read (and understand!) the T&Cs of your 0% card very carefully.

The debt is with Creation via a Currys YourPlan account so I'm not sure what it would be classified as.

This is the reason I've been a little bit hesitant in terms of applying for a card because I'm not sure what banner it would be under and the last thing I want to do is create a worse situation financially.

It would depend to some extent on what card you applied for, but most - actually, probably all, but I can't 100% guarantee that - cards would class paying off finance as a cash advance, which would cost you dear. 

The other option you could look into is a Money Transfer card.  This will transfer cash into your current account and put a corresponding debt on the credit card, which will charge interest at a low rate (possibly 0% if you're very lucky!).  You use the cash in your current account to repay the original debt, then repay the credit card bit by bit - though you do need to make sure you'll be able to repay it in full by the time the promotional rate expires.  Otherwise any remaining balance will start to attract interest at the card's standard APR, which will be pretty high.

You may be able to transfer any remaining balance to another 0% card, but it would be extremely unwise to bank on being able to do so.

Be aware there is usually a fee for doing a MT, but overall it can often be worthwhile for what you save by paying lower (or no) interest compared to the existing debt.

Brie

All of this assume you will be able to get a new card at all and one with a sufficient level of credit to allow you to make the payment or transfer or whatever.

Assuming you could get the card even with a smallish balance for 0% purchases there's then the possibility of using that for your day to day purchases until you get up to the limit and let that sit there paying just the minimum each month (as per the T&Cs) and use the excess ££ you have to hand to pay off creation. 

Also suggest you find out what "bank" creation is as that might affect whether you can do any transfers to it.