Paying off loan with credit card

jstvj

I have applied for a HSBC 0% credit card and would like to this to pay off a £5000 loan account. Is this possible please and how do you go about it, i.e. the only way I can see to make repayments onthe loan is by transfer fromanother Bank account, cheque or cash.

Would I have to draw cash from the credit card and if so, would that be too expensive ?

Any advice would be greatly appreciated.

Bokkens

NEVER NEVER take cash from a credit card as the interest is very high and is applied to your account immediately it is very expensive and a quick way to run up debts.
If you had done a little research on Martin's credit card articles(Balance Transfers) you would have noticed there are only a few cards that allow you to move money from a card to a bank account (MBNA cards,Virgin,A&L,Abbey,MINT,Egg)
You could phone up and cancel the card and apply for one of the above or if you have a good credit history/rating apply for one of the above and keep the Halifax One card when it arrives.
Good luck.

jstvj

Bokkens, thank you for your. I have read and re-read Martins advice on Balance Transfers, but I still cannot find any reference to being able to move money froma card to a bank account. I have just phone HSBC and they confirm I am not allowed to this with them, soI have cancelled my application. I read Martin's articles again,but ifyou can give me aclue it would help. Thanks again for your time

dellwear

You need a mule card - something like the Egg Money card where you can do a Balance transfer to the card and then transfer that to your current account. The Stoozers normally at this point stick it in a high interest account and leave it until they need to pay it back. that way they make free interest on the banks money.

With you, you're trying to do the same but pay off a debt you have.

Two things - the 0% on the HSBC card I believe is for purchases only, not balance transfers.
Secondly, will you be able to pay off the debt in the year the 0% is on? If not what's your intention when the 0% comes to an end?

A good article on this:
http://www.moneysavingexpert.com/cards/stooze-cash-credit-cards

A nice idea but I'd be wary if I couldn't clear the loan by the time the balance transfer offer lasts. Once it ends you'll probably spend more on interest than you'd save.

jstvj

Dellwell, thanks for your very helpful advice. I have read the article you suggest and it is just what I need. I do recall reading that a while ago but as it was not applicable to my situation then, I did not lock it away in the old brainbox (not much storage room nowadays anyway).

Basically, I have a Cahoot Flexible loan, originally had quite a good interest rate, which has gradually crept up over recent months. I have a debit balance of £5000, (just bought a new car) which I can pay off within the 12 months, so one of the named cards would be ideal.

When I phoned to cancel my HSBC application, I was told that a letter was in the post refusing a card (can't understand it because after 20 years, in May I finally pay off my Business Development Loan with HSBC, don't like them anyway). I am going to write to all 3 credit agencies with my £2 fee to hopefully find out why. Meanwhile, using Martins' very helpful list I will choose a card company, which uses a different agency to that used by HSBC.

Bokkens

jstvj wrote: »

Bokkens, thank you for your. I have read and re-read Martins advice on Balance Transfers, but I still cannot find any reference to being able to move money froma card to a bank account. I read Martin's articles again,but ifyou can give me aclue it would help. Thanks again for your time

The cards that do this I have listed in previous post so these are useful cards in stoozing although they have a fee the long 0% periods allow a profit to be made when the BT'd funds are placed into a high interest account or a ISA for the whole 0% period.
Martin calls these cards Super Balance Transfer cards as you can send the balance straight into your bank account allowing you to then write a ceque to pay off loans,motgages,buy a car etc.
In your case you at this point you can either pay off the credit card,or select another (new) 0% card and BT from the old card to the new thereby keeping your £5000 debt at )% until it is paid off.
Stoozers don't have this debt to pay off so all the BT funds are taken from our savings accounts and returned to the 1st credit card or we do as I outlined and get a new 0% card and pay off the 1st card with that leaving the funds in the savings account to gain more interest.
Hope that clarifies it,if not post again.