business back up cash

I've read varying reports about stoozing, and read martins article
However, i just need your advice incase i'm wrong

I'm starting a business and money will be tight,
I dont want to get a loan as I think I can cope,
However, I want a security net that will enable me to access money incase things go wrong

I was thinking of getting a 0% card and positive transfer to egg, and then store it in savings,
If not needed after 1 year, i can pay it off, an earn some interest in my ISA

Can you tell me if this will work, and what egg card i need to apply for

Here is what i'll do
1) apply for egg Card (which one?)
2) apply for a 0% balance transfer card with no fee's
3) transfer to egg, then into current acc, then into ISA
4) balance transfer after 6 months to other card with no fee's and 0%
5) after 1 year withdraw money and pay off CC

Is this possible to do without incurring any fee's (on the right cards, M&S etc)

If there is anything i need to know then please tell me
Thanks
Mark

Replies

  • wayoflifewayoflife Forumite
    281 Posts
    m.r.davies wrote: »


    1) apply for egg Card (which one?)
    2) apply for a 0% balance transfer card with no fee's
    3) transfer to egg, then into current acc, then into ISA
    4) balance transfer after 6 months to other card with no fee's and 0%
    5) after 1 year withdraw money and pay off CC
    Mark

    This would work in theory. The Egg card you need is An Egg Money card (which is a Mastercard) and not the visa... the visa is the one that appears first when you visit the website...

    However, you will find it hard to find a 0% with no balance transfer fees. At present the M&S Card is set at 4.9%... also there is a barclaycard with no fees, this is at 5.9%

    therefore you may want to do this method, which I would suggest if you cant find a 0% with no fees:

    1) get a 0% ineterest credit card for the maximum time (13 months if you can)
    2) channel your spending so that you spend all your personal purchases on this card
    3) keep the money you would have spent in your chosen savings account

    ok this way it may take a couple of months to accreu the money rather than instant, but you will avoid the interest charges...

    You also need to take into account the following things:

    a) The effect it will have on your business 'lending' i.e. if you do get 2 credit cards (on your method) then it may effect the amount you may need for your business with regards to business loans e.t.c.

    b) You must pay the minimum payment each month, so therefore you need to think about how to do this... (I would suggest paying directly from the money you are saving, therefore you will keep everything simple). You will need to take this into account obviously when it comes to interest being calculated.

    c) the type of savings you will keep the money in. Ideally I would reccomend an instant savings account (you can still get an ISA) but also make sure that you will not get charged a penalty for withdrawing. This is because you will need to withdraw money each month, and also you will need access to the money straight away, unless you work out all the dates in advance...
    usually the savings that charge you penalties will not be that much better in interest, but if you do find one thats substantially better, then work out your minimum payments each month, until the 0% period has ended, and then only deposit the amount left over. The rest keep in an interenet saver. This way you will avoid the interest penalties!

    So to sum up:

    if you can get a card at 0% bl transfer with no fees, do your method,

    if not, do mine

    let me know what you think matey

    cheers
    INCREASE INTEREST ON SAVINGS!

    ...I will thank you if youve been helpful, please do the same! :j
  • m.r.daviesm.r.davies Forumite
    123 Posts
    Thanks mate thats a great idea, simple too!

    I may just live off credit cards for the few months and put the money away in savings
    If i dont need it then i can just pay it all back at the end of the term
    I will just have to make sure the both accounts are pretty similar in balances each month, one + the other -

    Does anyone know of any products out there that will suit my requirements??
    I take it you were on about a CC that is interest free on purchases ?

    Cheers for your help,
    Mark
  • wayoflifewayoflife Forumite
    281 Posts
    Barclaycard is offering 0%for 10 months on purchases, so has capital one I think until July 2008

    also check M&S as it did have 0% for a year plus you get points (which are translated into M&S Vouchers)

    you can also look on the main site here to find the best deals on purchases

    Just be careful mate that if you are borrowing for business then you should ideally have a business card, however the deals arent as good. Tesco have a couple of business cards, which you get money off petrol and clubcard points.

    The best advice I could offer you is make a one year plan... not just for your business for yourself aswell, think ok what am I going to need in the next year...this way youll avoid the pitfalls i.e. getting too much credit then being turned down for it in the fuftre.

    For example I do not need a 0% deal on purchases at the moment so I am looking for cashback cards. My aim for the next year is (obviously to keep my payments up and my accounts running perfectly) but also to maximise cashback.

    Always keep you eyes open for new offers, I feel a little bit of time and effort spent every once in a while really pays off, and its great to know that my advice helps people!

    So yes definately try to get the longest 0% deal possible, also ask does it give other offers to existing customers as this is important.
    For example Nationwide credit card only gives one offer and thats it. M&S Offer things all the time, so this is good to know if your plans change or if you need different things in the future

    Good luck mate
    INCREASE INTEREST ON SAVINGS!

    ...I will thank you if youve been helpful, please do the same! :j
  • m.r.daviesm.r.davies Forumite
    123 Posts
    Thanks

    The one year plan sounds like a good idea,
    I think by doing it your way, it will take the pressure off.
  • greyteam1959greyteam1959 Forumite
    4.2K Posts
    Part of the Furniture 1,000 Posts Name Dropper
    Forumite
    Mmmmmmmmm wonder what your accountant will make of all this money movement ?????
    Make cost you more in his charges sorting it all out than its worth
  • wayoflifewayoflife Forumite
    281 Posts
    mervyn11 wrote: »
    Mmmmmmmmm wonder what your accountant will make of all this money movement ?????
    Make cost you more in his charges sorting it all out than its worth


    hmmm well not really, only one credit card and one current account, if anything it will be easier, as the credit card statements are itemised, and most VAT compatible aswell
    INCREASE INTEREST ON SAVINGS!

    ...I will thank you if youve been helpful, please do the same! :j
This discussion has been closed.
Latest MSE News and Guides