Paying off a loan using a credit card

poptart_2

Hi

Just a quick question, if I used a credit card to pay off a loan early would it count as a purchase or a balance transfer?

NickX

Well I don't think you can pay off a loan directly with a Credit Card, the loan company probably won't take cards anyway.

However if you get a card with SBT (Super Balance Transfer) capability such as Egg or any of those ran by MBNA (such as Virgin) you can Balance Transfer funds direct to your bank account from where you can pay the cash to whoever you like. Hope this helps.

poptart_2

That does help but what I wanted to know is that seeing as alot of banks offer either 0% on balance transfers or 0% on purchases for a certain length of time what would this count as (If I did what you suggested above)? I don't want to go ahead with doing this then realise that the card I chose wont offer 0%.

housingroulette

...a reply for poptart.It must, surely, be viewed as a purchase;,in that, with a balance transfer, you are simply transferring an existing debt to another company,and not paying it off?

NickX

Super Balance Transfer counts as a Balance Transfer transaction, but when you actually do the transaction, I would advise speaking to them on the phone and confirming with the CS rep that the transaction will be charged at the preferential 0% rate. Also get the name of the CS rep and note the Date and Time of the call, so that if they do try and charge you interest later down the line, you have the evidence that they are in the wrong.