Using credit card or savings?

twopenny

So life's slung a lot of unexpected stuff at me all at once.

I need to pay for a bathroom (don't have one) another second hand car (mine is declared a money pit) heating broken, and some other scrap.

Question is do I use my savings which are currently getting a decent rate or would it be wise/feesible to get a zero for 1yr credit card and pay as I go?

I have the money in my savings to pay off the amount no problem but my thought is that I would end up better off at the end of a year. I see they now do them for 23mts but probably savings income will have dropped in 12.

I have done something similar years ago but things are less stable now than then and it's making me nervous.

So I'm I off the mark, should I take the direct root and just pay from my money or borrow and pay back? I'm a good saver and good credit. Just after thoughts and anything I may not have thought of.

born_again

If you can get a 0% spending card with a decent limit, go for it.
But 1st make sure that bathroom co will take payment via one, as well as car dealer. As many car dealers will only take a deposit, not the full amount.

jbrassy

If it was me, I would get the 0% credit card and pay it off in 23 months time. At least this way you can continue accruing interest on savings and continue to contribute to your savings over the 23 months. Interest rates are likely to be lower in a couple of years in which case it would make sense to pay the credit card off using savings. Paying for all this stuff using a credit card also has the added benefit of Section 75 protection.

twopenny

Thanks both of you. Not having used a zero credit card before I need to be sure.

I hadn't thought about checking the limit. Obvs now you mention it.

Brassy, yes, that's what I thought but wasn't sure of. I expected the rates to drop but they haven't and no sign of anything significient for a while. In fact they have gone up!

It will be a cheap second hand car from a local dealer (I live in the wilds) so not a problem. I can pay for the fixtures and fittings for the bathroom at least and would expect the company installing wanting card payment.

A card would give me leeway, pay for bathroom perhaps in part. If I'm lucky enough to find an old car not needing a mortgage that could go too giving me some months to hopefully build my bank account up or get some interest flowing.

born_again

twopenny said:

Thanks both of you. Not having used a zero credit card before I need to be sure.

I hadn't thought about checking the limit. Obvs now you mention it.

Brassy, yes, that's what I thought but wasn't sure of. I expected the rates to drop but they haven't and no sign of anything significient for a while. In fact they have gone up!

It will be a cheap second hand car from a local dealer (I live in the wilds) so not a problem. I can pay for the fixtures and fittings for the bathroom at least and would expect the company installing wanting card payment.

A card would give me leeway, pay for bathroom perhaps in part. If I'm lucky enough to find an old car not needing a mortgage that could go too giving me some months to hopefully build my bank account up or get some interest flowing.

Don't bank on that. Many companies only take bank payments, as card payments cost them more.
So check 1st.

MallyGirl

If they don't take cards you can at least put all your other spending on a 0% purchase card freeing up monthly income for the improvements. As long as you don't build up more debt on the card that you have savings to cover then you will make a bit of interest.

twopenny

Both good points.

Surprisingly for a rural area with poor wifi most people use card machines even the coffee van on the harbour

But yes, the only one not likely to is the bathroom installer. They tend to like bank transfer. But as long as I work an amount for the card and use in areas as suggested I should do it long enough to balance the whole thing.

I've asked 2 banks about 0% cards. NatWest (on the MSE list) want me to apply online but my bank does one and should give me 15mts. I'll think about this as I intend or expect to use this for 12mts or less by making personal savings elsewhere.

As my Grandmother taught me, make a list of what you spend for a week. You quickly see where the small amounts add up. It's a pain but it works.

martinbainbridge1975

alternative is an MBNA money transfer card, however a point to consider is they will usually they charge 3-4% fee for money off the card

nothing wrong with using the 0 per cent route if you have the disposable income for making payments off the card and discipline to make sure the card is clear before the end of the 0 per cent period

twopenny

I think that the 15mt one is probably a good idea.
Time to get over this weird time post pandemic and limit time to pay off but not long enough to let it slide.

Yes, don't like debt and disciplined. Also I know i can pay from savings if I must.
Savings are giving me income at the mo. It's lack of interest plus raging inflation has got me to this.

WillPS

Put it on a credit card, let it roll. Just don't be tempted to spend beyond your means, keep your savings in step with the total balance.