Credit Card or Loan

simp81

Need your guys help, I need 6K for a purchase of a new car

I intend to repay it all over 2yrs and I also have good credit history.

What would be cheaper a loan or credit cards with offers.

Thanks

YorkshireBoy

simp81 wrote: »

What would be cheaper a loan or credit cards with offers.

Credit cards with offers could be around 60% cheaper than a loan (assuming 2 x 3% fees are required).

simp81

Thanks YB for the reply,

That’s what I was thinking,

If I was to get two card both with 3K and 3% bal transfer fee, would I be getting 6k at 3%?

NickX

Yes the 2 cards would equate to 6K at 3% as long as the 0% promotions are for at least 12 months.

I have bought cars using Credit Cards before now, and have paid very little interest, it can work out well but remember to plan in advance if you need to Balance Transfer to another card at the expiry of the promotional period.

Good Luck with your car hunting.

simp81

Thanks for the replies, I have just been approved a Virgin CC with 6.5k limit.
Now just have to find a car!

YorkshireBoy

simp81 wrote: »

Thanks for the replies, I have just been approved a Virgin CC with 6.5k limit.
Now just have to find a car!

Virgin Money or Virgin Atlantic 'White'?

I assume you know not to go buy the car on the card itself? Instead, you should make a balance transfer from your current account, and let Virgin send the money directly there. Then, you buy the car with cash/debit card/cheque as necessary.

NickX

Good Advice as ever from YorkshireBoy.

If you actually buy the car on the credit card, then the dealer has to pay the merchant fee on the transaction and they may well pass on this charge. They are definitely not going to sell you the car at the best price that they can do.

However, if you transfer the funds to your bank account, and then pay for the car with cash you should be able to negotiate a substantial discount from the dealer which I would hope would at least cover the Balance Transfer fee.

YorkshireBoy

NickX wrote: »

If you actually buy the car on the credit card, then the dealer has to pay the merchant fee on the transaction and they may well pass on this charge. They are definitely not going to sell you the car at the best price that they can do.

However, if you transfer the funds to your bank account, and then pay for the car with cash you should be able to negotiate a substantial discount from the dealer which I would hope would at least cover the Balance Transfer fee.

I was thinking more of the very short 3 months 0% on purchases duration, whereas it's 15 months on (S)BT's.

NickX

Ah very true, 3 months on purchases isn't a very good deal at all. When I took out my Virgin card, I didn't even think about that, just transferred the lot (well as much as they would allow) to my Bank Account.

Two good reasons for the poster to use the SBT route.

Purple_Peril

Actually, if it's the MBNA/Virgin Money card they offer 15 months 0% on CC cheques - so the OP could pay for his car with a CC cheque.

NickX

I think the cheques are treated as Balance Transfers.

I wonder what the dealer would think about taking a Credit Card cheque. I'm not sure if they have to pay any extra merchant fees on that, I suspect not as its actually a Balance Transfer transaction rather than a Purchase transaction.

My own experience is that a wad of notes tends to get a sparkle in the dealer's eyes, so the OP could use the cheque to pay the funds into his Bank Account, then take the cash out and negotiate a deal on the car of his dreams.

Either way its an excellent way to finance a car (IMO), hmmm, an new set of wheels is always rather tempting.