Balance transfer to credit card

misschevious_13

Hi,
Does anyone know how you can pay off a loan with a bank to a credit card, that I got specifically to do this for, to cut my interest payments. I have tried through the bank, they won't accept it, and I have tried it through the credit card, they too won't accept it. Any suggestions

DullGreyGuy

A balance transfer card can only move a balance from another uk issued credit card. If you want to pay off a loan you need a money transfer card which will allow you to move the money to your UK bank account and then onwards to the loan. 

Note MT cards typically have less preferable terms etc -v- BT cards.

misschevious_13

I believe it said balance transfer/money card. Lesson learned. I now have a creditcard I don't need, impacted on my rather favourable credit score. I am loathe to just cancel it now. Any suggestions what's best?  (Without running up a debt) 

CliveOfIndia

misschevious_13 said:

I believe it said balance transfer/money card.

It's worth checking - if your card does indeed have a Money Transfer offer then it's worth doing the sums to see if it'll save you anything.  There's usually a transfer fee, and - as noted by DullGreyGuy - the interest rate is likely to be low rather than zero.  But, depending on the terms of your loan, it may still be advantageous.  Do remember that if you settle a loan early, the lender is allowed to charge up to two months-worth of interest as an early settlement penalty (or one month's interest if there's less than a year left to run on the loan).

misschevious_13 said:

I now have a creditcard I don't need, impacted on my rather favourable credit score.

Don't worry about your score, it's just a marketing gimmick that's not used - nor even seen - by any lender.

You will have a hard search recorded on your file from when you applied for the card - but this will have a miniscule effect - on it's own - on your credit history.

In terms of what to do with the card - it's up to you.  You could close it if you're never going to use it.  Or, if you have no other credit cards, you could use it to start building up a credit history.  Just use it for routine, budgeted purchases (food, petrol, etc.) and make sure you always repay the balance in full every month when the statement comes in (ideally set up a Direct Debit for the full balance).  Doing this will cost you nothing (you'll pay no interest as long as you always clear it in full every month), and it will gradually build up a favourable credit history (handy if you ever want any form of credit in the future).