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  • FIRST POST
    • zoot_ze
    • By zoot_ze 18th Sep 19, 3:13 PM
    • 14Posts
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    zoot_ze
    Money transfer to pay off same credit card?
    • #1
    • 18th Sep 19, 3:13 PM
    Money transfer to pay off same credit card? 18th Sep 19 at 3:13 PM
    So I just wanted to get some thoughts on my plan to minimise interest paid in the next couple of months.


    I have one credit card with a limit of 4000. Up until recently I spent about 300 p/m on it and paid it back in full, but next month I have a large holiday so have racked up a higher balance of 1500 by paying for accomodation and flights, which I won't be able to pay back in full next month, so will be charged interest at 22% for a couple of months - I worked out it would be about 60 of interest.


    Usually I would just pay the whole amount off with savings however I just bought a flat a couple of months ago so my savings are bare-bones emergency, a couple months of expenses. I could pay off the balance but it would leave me with almost no savings.



    My credit card is currently offering a deal on money transfers - 4.9% for 3 years with no fee. If I took out 1500 this way, instantly used that to pay off the higher interest purchases balance on my card, and paid it back over the two months I'd be paying more like 12 interest.


    Is there something I'm missing here that would be a downside to this plan? Would taking out a money transfer look bad for other lenders when applying for credit in the future?
Page 1
    • Terry Towelling
    • By Terry Towelling 18th Sep 19, 3:46 PM
    • 1,973 Posts
    • 1,665 Thanks
    Terry Towelling
    • #2
    • 18th Sep 19, 3:46 PM
    • #2
    • 18th Sep 19, 3:46 PM
    Just wondering about those savings you have for contingencies. If you were to use those to pay off the balance, you would then be able to use the freed up credit on the credit card for contingency spending instead - if any contingencies actually arose.

    Obviously, if the types of contingency you envisage aren't the sort you can pay by credit card, then that's a bit of an issue but if no contingencies arise, it's fine - it's a bit of a gamble.

    If you do use the savings you could then replenish them over the course of the next couple of months and pay no interest at all. That route would only cost you the lost interest on the savings (assuming no contingencies crop up).
    • zoot_ze
    • By zoot_ze 18th Sep 19, 4:00 PM
    • 14 Posts
    • 10 Thanks
    zoot_ze
    • #3
    • 18th Sep 19, 4:00 PM
    • #3
    • 18th Sep 19, 4:00 PM
    Just wondering about those savings you have for contingencies. If you were to use those to pay off the balance, you would then be able to use the freed up credit on the credit card for contingency spending instead - if any contingencies actually arose.

    Obviously, if the types of contingency you envisage aren't the sort you can pay by credit card, then that's a bit of an issue but if no contingencies arise, it's fine - it's a bit of a gamble.

    If you do use the savings you could then replenish them over the course of the next couple of months and pay no interest at all. That route would only cost you the lost interest on the savings (assuming no contingencies crop up).
    Originally posted by Terry Towelling

    I'm actually most worried about contingencies while I'm on holiday - it's a cash-based society so if I have an emergency and need to pay something urgently, it'd be easier to transfer the savings to my Starling card and withdraw that at an ATM than to do the same with my credit card (no fees abroad but interest charged straight away).
    • Terry Towelling
    • By Terry Towelling 18th Sep 19, 6:28 PM
    • 1,973 Posts
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    Terry Towelling
    • #4
    • 18th Sep 19, 6:28 PM
    • #4
    • 18th Sep 19, 6:28 PM
    Are you planning on spending a lot whilst on holiday?
    • zoot_ze
    • By zoot_ze 19th Sep 19, 9:17 AM
    • 14 Posts
    • 10 Thanks
    zoot_ze
    • #5
    • 19th Sep 19, 9:17 AM
    • #5
    • 19th Sep 19, 9:17 AM
    Are you planning on spending a lot whilst on holiday?
    Originally posted by Terry Towelling

    Yes - it's been planned for 2 years and is a once in a lifetime thing, so I'm not being very MSE while I'm there.
    • Terry Towelling
    • By Terry Towelling 19th Sep 19, 12:29 PM
    • 1,973 Posts
    • 1,665 Thanks
    Terry Towelling
    • #6
    • 19th Sep 19, 12:29 PM
    • #6
    • 19th Sep 19, 12:29 PM
    If one were being hyper-critical, one might say that you have had 2 years to save up for this and shouldn't be in this sort of position. One might also say, that your 'bare-bones emergency' savings are in fact not a contingency measure but your holiday money, because that now seems to be your plan for them.

    No matter, as long as there is no fee attached to taking the money transfer, your plan to effectively swap the 1500 'holiday debt' at standard APR for a lower APR is probably quite a practical solution.

    I don't think you should worry about what other lenders 'might' think of you taking a money transfer - to be honest, I'm not even sure they would know you had.

    Enjoy your holiday, be very careful with your cards and cash, and watch out for bogus ATMs!
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