Will 0% credit card affect credit rating

PT3

Hello. 
I am aways a fan of MSEs money making schemes.
Every month I try to spend everything on my credit card. I get a nominal return as 'Reward' but am considering getting a 0% (purchases) credit card, spending everything on this over the 12 month period, and investing the money in an ISA instead of paying off the card monthly.
I would then pay off the entire credit card at the end of the year (approx £30k).
I reckon I can make around £1200 interest from the ISA over the 12 months, but will this adversely affect my credit rating (or anything else important) at all?
Thanks for any advice. 
Pedro

MattMattMattUK

PT3 said:

Hello. 
I am aways a fan of MSEs money making schemes.
Every month I try to spend everything on my credit card. I get a nominal return as 'Reward' but am considering getting a 0% (purchases) credit card, spending everything on this over the 12 month period, and investing the money in an ISA instead of paying off the card monthly.
I would then pay off the entire credit card at the end of the year (approx £30k).
I reckon I can make around £1200 interest from the ISA over the 12 months, but will this adversely affect my credit rating (or anything else important) at all?
Thanks for any advice. 
Pedro

Yes it will lower the made up and pointless number that is your credit rating. 

Overall it will probably have little impact unless you are trying to get a mortgage or other credit during the period when you are carrying thr debt. 

Wha card are you considering? Most cards do not allow interest free spending over the full year, they allow a 1-3 month period at the start for the transactions and then those transactions are interest free for the twelve month period, but generally and spending after that initial period attracts interest in the normal way.

grumpy_codger

The effect can be both negative and positive as there are two contradictory factors:

• credit to income ratio
• credit utilization  - the percentage of available credit that you’re using on your credit cards

A new (extra) credit card affects negatively the former and positively the latter.

wiseonesomeofthetime

I would be very surprised if you could get a 0% purchase card with a £30k credit limit as that could be a great risk to the lender, regardless of your income.

I have a CC that allows 0% purchases for the full 18 months of the promotion (Chase) and had two recently from RBS that allowed 23 months of spending, but as pointed out above, read TandCs carefully as some state 30 or 90 days, that I have seen and avoided in the past.

If you pay only the minimum each month, your credit report will show that you arealing such payments, however, it "should" also show that it was during a promotion.

Credit utilisation may impact future offers, during life of that promotion, but ignore the marketing number, as also guided to previously.

PT3

Thanks everyone I appreciate all the replies. You made some really good points I hadn't considered. 
I'll have to look into the details of the credit limits/promotion period a little more carefully. Also realised (after posting on the forum) that I can only invest 20k per year in the ISA anyway, so would need to account for that too. I pay into the ISA regularly on payday already, so that brings it down further.
So with some rough maths... realistically I'm probably looking at about 16k max 'credit card spends' to make this work. That's about £1300  pcm with a return of about £360 after 12m investing monthly in a 5% ISA.
Not to be sniffed at but a bit of faff involved.
Thanks again for the advice and swift replies.
Pedro 

eskbanker

PT3 said:

Also realised (after posting on the forum) that I can on invest 20k per year in the ISA anyway, so would need account for that too. I pay into the ISA regularly on payday already, so that brings it down further.
So with some rough maths... realistically I'm probably looking at about 16k max 'credit card spends' to make this work. That's about £1300  pcm with a return of about £360 after 12m investing monthly in a 5% ISA.
Not to be sniffed at but a bit of faff involved.

You don't need to use an ISA for the savings though, so don't need to design your scheme around the annual ISA contribution allowance - depending on your other income you should have a personal savings allowance that shields up to £1,000 of (non-ISA) interest income from taxation.

However, as noted above, the available credit limit on a 0% card is more likely to be the constraint here....