help 1st time user - loan V credit card

belladonna2

Wonder if anyone out there can help. Iwant to borrow £6,000 for home improvement and don't know what is most cost effective way of doing it. I have a balance on barclaycard for (2,000)0% until August but don't want new spending on this. Could add on to mortgage which is currently fixed rate until May of 3.9% but will no doubt go up after that. Wondered if better to transfer to lifetime balance card or to pay off barclay card whilst dealing with lump sum separately. Just going round and round in head. I know I can get a sceured loan of up to £10,000 for mortgage lender (northern Rock) to run along with my mortgage for another 22 years but think this may be quite costly if interst rates rise. Be great to hear from you - especially you Martin as first time user of site. Thanks

Robert_Sterling_3

Why are you reluctant to spend on a 0% Barclaycard?

MarkyMarkD

Welcome to the site.

Given that your fixed rate expires in May, why don't you wait until then and remortgage your property for the existing mortgage value + £6,000?

Then you will save money on Northern Rock's SVR and your repayments will probably not be much higher than at present, but you'll get your home improvements done too.

I presume you don't have the credit card capacity at 0% to fund this, because otherwise I would say as RS does, why not fund it on a 0% card?

Even if you did decide to fund the home improvements another way, I would look at your options when May comes up - NR will almost definitely offer you another deal but it almost definitely won't be the best you can get if you look around IMHO.

Rafter

Always best to try and match your borrowing to what you are buying.

If your home improvements are things like a new kitchen or redecoration are they really going to last 22 years or are you better off trying to pay back over a much shorter period, say 5 years?

5 years is a long time to play the credit card shuffle so you may find that a bit tough.

One option might be a 'life of balance' transfer with the likes of Capital 1 or Texaco if you can persuade them to give you a large enough limit. Current rates are about 3.9% and fixed.

Good luck.

R.

belladonna2

Thanks to all who replied.

Was reluctant to use barclaycard as only o% interest on balance transfers. However further problem in that company involved say they do not accept credit cards. Company is legitimate consumer group so nothing 'dodgy' but still need to find solution. Any sneaky ideas anyone or is the 'loan' road my only option.? Or could I somehow get a cash advance. Friend told me that a company possibly mint can send you blank cheques for you to pay off your debtors up to your credit limit. Has anyone heard of this?

If loan is best way either adding to mortgage now or separate loan over less years? What do you think?

Thanks

dag_2

Was reluctant to use barclaycard as only o% interest on balance transfers. However further problem in that company involved say they do not accept credit cards.

Hmm. If you wanted to do a balance transfer on the barclaycard in the future, would you still be able to get 0% for it?

If so - then you could pay for the improvements with a different card, then transfer the balance to barclaycard. You could even take a cash advance on another card - mind you, you'll probably be charged a handling fee for this - so MMD's suggestion might be cheaper.

If your limit is big enough to cover it, I'd say definitely go for a balance transfer on the credit card. Like Rafter says, 5 years is a long time to hope that new 0% balance transfer deals will keep coming up. But then again, if you don't get a new 0% deal when your current one runs out, you can always remortgage to pay off the credit card at a later date.

Reaper

Friend told me that a company possibly mint can send you blank cheques for you to pay off your debtors up to your credit limit. Has anyone heard of this?

Yes, read this article. It will tell you how to get money from 0% credit cards into your bank account without fees. Egg and Mint are the cards to look at.

I think I need to add this to my signature I say it so often.

EDIT: Corrected URL

scheming_gypsy

Was reluctant to use barclaycard as only o% interest on balance transfers.

Be worth checking that.. when i activated my card i asked if it was just BT's and they told me it was both BT's and purchases till August 2005.

zcaprd7

Its so easy to balance transfer credit into one's bank account that there's no need to look at 'purchase' rates or cash advance rates.

I believe you can balance transfer the remainder of you Barclaycard to your "overdraft" at 0% and then spend that, and if needs be, transfer that balance to another 0% card when that expires...

Debt_Free_Chick

I believe you can balance transfer the remainder of you Barclaycard to your "overdraft" at 0% and then spend that, and if needs be, transfer that balance to another 0% card when that expires...

Unfortunately not with Barclaycard. Firstly, they will not allow a BT to a current account and if you try to do this you may end up with a Cash Advance at horrendous APR!!

The only cards that allow you to BT to a current account are Egg, MBNA (But their T&Cs allow them to charge a fee, so check) and Mint (using special BT cheques that they supply - you may have to call them).

HTH