Paying off Skoda VMFS finance agreement with Lloyds Ultra credit card

the4amfriend

So I've got a PCP with Skoda VMFS and I'd like to pay it off with Lloyds Ultra credit card and I have two questions. 

1. Will I get the 1% cashback? Have any of you tried it? Most probably not but I want to double check if any of you have tried and had the luck. 
2. Will I be charged for it? It does say free cash withdrawals but this is a cash transaction so might incur a fee? 

I also have an ASDA credit card if that helps - no idea if that changes things. Appreciate your thoughts. 

Brie

I thought that PCP was a credit agreement vaguely similar to a loan and therefore couldn't be paid off with a CC.  

TadleyBaggie

Last time I paid off a PCP, I couldn't even use a debit card, they would only accept a bank transfer.

the4amfriend

I spoke to Skoda VMFS and they said they take CC.

figgyc

The Lloyds Ultra card specifically has no cash transaction fees, that is both ATMs and other types of cash transactions, so you won't need to worry about that, but cash transactions charge interest as soon as they happen, rather than the usual behaviour with purchases (charged after your statement date if you don't pay in full), so I'd pay the card off (if you can) in full as soon as you make the payment, otherwise you will be charged a bit. (and if you can't don't do this!)

Anecdotally - besides ATM withdrawals, different card providers are stricter than others on what purchase categories (Merchant Category Codes assigned to retailers) they consider to be cash transactions. Lloyds Banking Group are on the stricter side - when I bought a gift card on my Halifax Clarity (which is basically a Lloyds Ultra but no cashback) I got charged a bit of interest, but I don't when I buy from the same website on my Barclaycard. And car finance is much more "cash-like" then gift cards are, I would be very surprised if it isn't counted as cash.

If you really still want to try - if possible you could pay off part of the loan (say £10 or even £1) and see what happens with the cashback? I'm not sure if you can see if you got the cashback or not until your statement though, it is a new card and I don't have one, not sure if many will yet.

retiredbanker1

I would double check that you can pay using a credit card.
Google suggests otherwise.

the4amfriend

figgyc said:

The Lloyds Ultra card specifically has no cash transaction fees, that is both ATMs and other types of cash transactions, so you won't need to worry about that, but cash transactions charge interest as soon as they happen, rather than the usual behaviour with purchases (charged after your statement date if you don't pay in full), so I'd pay the card off (if you can) in full as soon as you make the payment, otherwise you will be charged a bit. (and if you can't don't do this!)

Anecdotally - besides ATM withdrawals, different card providers are stricter than others on what purchase categories (Merchant Category Codes assigned to retailers) they consider to be cash transactions. Lloyds Banking Group are on the stricter side - when I bought a gift card on my Halifax Clarity (which is basically a Lloyds Ultra but no cashback) I got charged a bit of interest, but I don't when I buy from the same website on my Barclaycard. And car finance is much more "cash-like" then gift cards are, I would be very surprised if it isn't counted as cash.

If you really still want to try - if possible you could pay off part of the loan (say £10 or even £1) and see what happens with the cashback? I'm not sure if you can see if you got the cashback or not until your statement though, it is a new card and I don't have one, not sure if many will yet.

Really good points, thank you. I'll see if I can do what you suggested with a £10 payment. 

I just found out I could save £1.5K on interest if I paid off my PCP right now and I do have the cash. I would like to pay through credit card if it would help in any way - which is why I just applied for the Lloyds card, if not I'll just pay with the money on my bank account.  

Nasqueron

the4amfriend said:

I spoke to Skoda VMFS and they said they take CC.

They might take a CC for say an initial deposit of £500 but clearing PCP might be different. It's also dependent on what limit you get, it might be enough only for some of it so you'd have to pay it, clear the card, pay again and see if they agree

MyRealNameToo

the4amfriend said:

I spoke to Skoda VMFS and they said they take CC.

Most the time if you pay a loan with a CC it counts as a cash advance rather than a purchase. Most CCs thats bad news because you pay a fee, your pay interest immediately and it doesnt qualify for any of the credit card perks. 

Looking a the Lloyds Ultra card it doesnt charge fees for a cash advance but the other two points remain so you won't get cash back and you'll be paying interest from day 1. 

There is a slim chance that the MCC for VMFS hasn't been flagged as finance and therefore doesn't count as a cash advance but I'd be surprised if it didnt... may have had better chances with a much smaller lender.