borrow from c/c to pay mortgage ?

alanco15

forgot to mention that i have just received my visa card from oneaccount, so how would i get a balance transfered from another card to it , will the other credit card not ask question when they discover it is a oneaccount it is going to,
as i'm sure they would know what am i doing.

bunking_off

I do this a lot with my One Account. Ignore mentions of "mule" cards...you don't need them with the OA. Simply transfer a balance from the OA Visa Card to your 0% card (ie tell the 0% provider the number of your OA Visa card as the one you need to BT). This will give your OA Visa Card a positive balance, which will sweep into your main OA account (hence reduce the balance) approx a week later...usually the following Wednesday from memory.

Some "top tips";

- Because of the BT fees, longer deals are obviously better than shorter ones. Personally I don't bother with 6 month deals...more trouble than they're worth.

- Try to read up on the T&Cs of the 0% card. On some - MBNA I think - the monthly repayment is very small, only £15. On others, you're repaying 3% of the outstanding balance every month. Over a longer term deal, that can be material because the outstanding balance at the end of the deal is a lot less than what you transferred, so net you're only saving on a lower amount than you BT'd.

- consider a life of balance card. Citibank have one with no BT fee at 5.9% fee-free I believe, which means that so long as the OA rate stays above that, you'll be gaining (and as soon as it drops, you repay the lob card). There's a cheaper one at 4.9% + 3% BT fee...you'd need to do the maths (critically looking at the minimum repayment) to see if that works out better - depends on when you'll be paying off your OA. Pity it's not available any more, but I have a few £k sat on an M&S card at 3.9%...other than the minimum payment I only intend to repay that once my OA's paid off.

- The OA have no problem with you doing all of this...indeed I've seen promotional materials by them that encourage you to do so.

FreedomGirl

Hi bunking_off,

We also have a OneAccount (see balance below)...I've just reread your post and got a bit tied up in the semantics (at first).

Can you just check my understanding for me?

I apply for a credit card and they give me a 6K balance at 0% for 12 months (say) with a 3% BT fee (upfront) and monthly repayments. I then do what you posted...and get a loan of 6K interest free minus payments above.

That's right?

My gut feel is that, for the relatively small sums involved (and also considering the small difference between a life of balance interest rate and the current OA rate, which is the alternative approach), it's not worth the risk of us screwing up. (I read somewhere that a 3%BT up front was equivalent to a rate of 5.75AER)

Now, if some of those new 3.9% deals come about...:)

FG

bunking_off

That's basically it. Let's take your example of a £6k balance. If there's a BT fee of 3%, the amount that will appear on your cc bill will be £6180, and you'll initially reduce your OneAccount balance by £6000.

Let's take a 0% 12 month deal, minimum payment = 2.5% of outstanding balance per month. Losing £6k from your OA will save approx £400 in interest, leaving the effect of repayments to one side. If we allow for you paying back the 2.5% from your OA, you'll have paid approx £1230 back by the end of the 12 months, ie your outstanding balance on the cc will be £4950 left on your card, that you'd then repay. So you're not actually saving £400, it's a bit lower because any money that you repay during the 0% period starts incurring the OA interest rate...take my word for it, but the net impact is you'll save approx £350 for your £180 BT outlay. Worth doing it.

On the LoB deals, you need to remember that although your 3% fee is applied to the card upfront, you'll be making savings - unless interest rates plummet or you've paid off your mortgage - for many years to come. For example, again based upon a 2.5%/month repayment, after 4 years you'll still have just shy of £3k which you'd still only be paying 4.9% on versus the OneAccount rate. It's more marginal, but you'd say about £90-100 in interest over the 4 years. If my maths are correct, a LoB transfer at 5.8% fee free would save c£150 over the 3 years, assuming interest rates stay static. I'd say it's better going for the latter because you're not "gambling" the 3% BT fee that rates will stay above 5.8%...it's a one way bet because if/when interest rates fall, you simply pay off the credit card.

Like you say, it's a risk that you don't screw up. It's critical with stoozing to keep good records of what you're doing, remember to pay 0% deals back at the right time (that's why I prefer LoB), and set DDs up for the minimum repayment. It's a hassle, but "free" money.