Credit card Money transfer or Bank loan for a private event, that needs paying now?

bencattell

I need to pay for a balance on an event (7k).  I will have this money by the end of the year to pay off the debt.  However, I need this to pay now (next two months).  Do I use a loan at 7.4% APR over 4 years £168pm (guaranteed acceptance) with a view to settle at the end of the year.  Or should I use an existing credit card with a money transfer rate of 5.9% APR and 0% fee,  which works out around £40pm in interest. 

Thoughts on best economic sense?   As it stands I envisage paying the debt in full before December 2024

MorningcoffeeIV

Best economic sense is driven by the APR.

Plus, there is no early settlement fee on a credit card.

bencattell

That's my opinion too, but ive never done a money transfer and does that impact credit ratings etc and red flags for future lending

MorningcoffeeIV

It will show as a debt on your credit files, like any other.

junglist_matty

bencattell said:

Do I use a loan at 7.4% APR over 4 years £168pm

After 1x year you'd have paid about £466 in interest.... Let's not forget the loan probably has an early settlement fee of some description, so let's assume the total cost to borrow the money via a loan is around £500.

bencattell said:
Or should I use an existing credit card with a money transfer rate of 5.9% APR and 0% fee

Assuming you'll pay off the same £168 per month at 5.9%, that means after 1x year you'd have paid £370 in interest, and you'll have no "early settlement fee" as it's a credit card.

Cisco001

can you get 0% APR purchase card?
https://www.moneysavingexpert.com/credit-cards/best-0-credit-cards/

kempiejon

It's a bit of financial engineering but a 0% apr purchase card would be cheaper - the term is shorter; just before the end of the 0% period one could take a smaller loan for a shorter term which would be cheaper. Or balance transfer to a new credit card with another 0% apr period, there'd be a fee but overall much cheaper. In 2010 I bought a car on a 2 year 0% apr credit card and refinanced it with 2 more balance transfer getting me a very cheap 6 year finance period.

retiredbanker1

Does the 'event' take credit cards?

If not a Money transfer card would be the better option - although there is no S75 cover in this situation as you will be paying from wherever you deposit the funds yourself.