Loyalty points and balance transfers

matwalaboy

Hey everyone,

I’ve got a major house refurbishment coming up, with planned spending around £20,000. I’m considering applying for loyalty credit cards, like the Virgin Atlantic or Barclays Avios, to take advantage of sign-up bonuses, loyalty points, and companion vouchers. My thought is to hit the spending thresholds to earn these rewards and then transfer the balance to a 0% interest card for some breathing room on repayments.

Of course, this all depends on my being accepted and confirming I can afford it. My main goal is to maximize rewards on the spend and then stretch the repayment period with an interest-free option.

Has anyone tried a similar approach? If so, how did you go about it? Any recommendations on the best cards for this, or other tips to consider?

Thanks so much!

TheSpectator

Who are you going to be paying this £20k to?

Will they accept credit cards? Builders, tradesmen etc are unlikely to accept card payments.

Will the balance transfer fee negate any rewards? What if you don't get approved for a 0% deal to balance transfet to?

matwalaboy

TheSpectator said:

Who are you going to be paying this £20k to?

Will they accept credit cards? Builders, tradesmen etc are unlikely to accept card payments.

Will the balance transfer fee negate any rewards? What if you don't get approved for a 0% deal to balance transfet to?

Thanks for replying, it’s to buy the materials from relatively big shops who will all accept card payments. 

Newbie_John

Best rewards cards pay in points like Avios, Virgin points but if you don't travel then it's not much really, also they often can be a trap - Avios flight could be more expensive than RyanAir flight purchased with cash. 

You can get Amex Gold and exchange points for Nectar / Amazon points but the value goes down and you'll get maybe £200 max.

It would be much better to save using voucher codes, gift cards etc. as they offer 5-10% savings (which of course can be purchased with credit cards) but you lose protection, and if you end up returning £5000 item - you'll get gift card back rather than refund.

CliveOfIndia

TheSpectator said:

Who are you going to be paying this £20k to?

Will they accept credit cards? Builders, tradesmen etc are unlikely to accept card payments.

Will the balance transfer fee negate any rewards? What if you don't get approved for a 0% deal to balance transfet to?

This about hits the nail on the head.  As long as you are able to use a credit card to pay for the goods/services then it's a fine idea in principle.  But it's certainly well worth doing the sums to make sure that the balance transfer fee (if applicable) won't wipe out the value of any rewards you may earn.  And it's really important to have a back-up plan if you suddenly find yourself unable to get a BT card after you've spent a large sum on the rewards card.

DullGreyGuy

matwalaboy said:

Hey everyone,

I’ve got a major house refurbishment coming up, with planned spending around £20,000. I’m considering applying for loyalty credit cards, like the Virgin Atlantic or Barclays Avios, to take advantage of sign-up bonuses, loyalty points, and companion vouchers. My thought is to hit the spending thresholds to earn these rewards and then transfer the balance to a 0% interest card for some breathing room on repayments.

Of course, this all depends on my being accepted and confirming I can afford it. My main goal is to maximize rewards on the spend and then stretch the repayment period with an interest-free option.

Has anyone tried a similar approach? If so, how did you go about it? Any recommendations on the best cards for this, or other tips to consider?

Presumably you dont have cash to pay for it so need credit? 

The problem in your plan is the BT fee, you will be paying 2.5%-3.5% on the £20k to move it to the second card and it's only if you get high enough limits. The target value for the likes of Avios is typically 1% so in principle you're making a 1.5%-2.5% loss -v- getting a purchase credit card. 

This however ignores the signup bonus, which is only 5,000 at the moment, and the companion voucher plus any other airmiles you have... if the 25k of extra miles will get you a first class flight from a low tax airport then the c£600 BT fee may be worth it.