advice please - paying a bill by credit card?

iosono

I'm due to pay a £17,500 bill by the end of Jan.
I've set up a remortgage for £20k.
I would like to know whether I'd be better keeping my £20k in my online saving account (AER 4.40%) and paying the bill with a cheque from my credit card (cash advance and cheque handling fee 2.99%) and then immediately paying this off by splitting between several 0% balance transfer new credit cards.
I'm thinking that the minimum repayment on each card would be less than the interest I would earn for keeping the £17.5k in my account?
I would really appreciate your thoughts.
Thank you

lisyloo

What income tax rate do you pay?
This is crucial to the debate.

If you don't pay tax you will receive 4.4% from your savings account, but if you pay tax you will only get 3.52% or 2.64%.

Paul_Herring

Well the first thing I'd address is the poorly paying savings account. There are 6%+ accounts out there.

Secondly, have you taken into account that in addition to the 2.99% cash advance/handling fee, you'd (more than likely) be paying a further 2-4% BT fee when you transfer to the '0%' cards?

I think you'll be better off paying bills with savings.

That said - what exactly is this £20k - you seem to indicate it's cash from a mortgage, not 'savings' as such.

iosono

lisyloo wrote: »

What income tax rate do you pay?
This is crucial to the debate.

If you don't pay tax you will receive 4.4% from your savings account, but if you pay tax you will only get 3.52% or 2.64%.

You're right - I'd forgotten about paying tax too!

iosono

Paul_Herring wrote: »

Well the first thing I'd address is the poorly paying savings account. There are 6%+ accounts out there.

Secondly, have you taken into account that in addition to the 2.99% cash advance/handling fee, you'd (more than likely) be paying a further 2-4% BT fee when you transfer to the '0%' cards?

I think you'll be better off paying bills with savings.

That said - what exactly is this £20k - you seem to indicate it's cash from a mortgage, not 'savings' as such.

Thanks Paul - I've done the sums and it makes more sense to pay the bill from my remortgage money.
My online savings account is purely for convenience as it's linked to my current account and convenient on days such as today where I've had to transfer money to stop me going over my overdraft!

I'm going to look for a better rate though