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NorthWestPerm2Contr
25th February 2014, 10:38
Thinking of getting a comfy contractormobile and while I have the money there I want to keep my warchest healthy in case of downtime. I had a look at the latest bank transfer credit cards on offer and I was :eek: shocked. 29 months @ 0% with a 4% fee. That works out at 1.65% APR. is that not classified as free money?!

Looks like the cheapest loan one can get.....

Is this not symptom of the same disease we had before the crash?

northernladuk
25th February 2014, 10:40
Wait till you see the credit limit they will lumber you with though..... Next to bloody useless.
And you can't transfer it to current accounts so will have to pay for whatever on the credit car which will normally incur a 5% charge.

They are not that stupid.

NorthWestPerm2Contr
25th February 2014, 10:41
Wait till you see the credit limit they will lumber you with though..... Next to bloody useless.

Actually I have opened an account with these guys several times. Usual credit limit is around 10k. Last time I managed to get 15k out of them.....

I tend to annualise my day rate rather than quote my accounts.

northernladuk
25th February 2014, 10:43
Actually I have opened an account with these guys several times. Usual credit limit is around 10k. Last time I managed to get 15k out of them.....

I tend to annualise my day rate rather than quote my accounts.

Good luck with that. I applied for the Barclaycard with 2 year period and they gave me 2.5k. There are different limits applied to different cards. They will be a lot more nervous about giving you large credit on products that you will obviously use just to transfer it all out.

Editing my comment about paying for whatever on the card as well.

d000hg
25th February 2014, 10:43
Is that 0% on the transferred balance only?

NorthWestPerm2Contr
25th February 2014, 10:44
Good luck with that. I applied for the Barclaycard with 2 year period and they gave me 2.5k.

Editing my comment about paying for whatever on the card as well.

MBNA credit cards I am talking about - 29 month interest free with a 4% fee. Can transfer straight to account. Don't tell too many people about it though.....

I never get less than 8k on credit cards. I close down accounts before opening new ones.

NorthWestPerm2Contr
25th February 2014, 10:46
Is that 0% on the transferred balance only?

Here is how it works:

1) Open credit card account.
2) Transfer e.g. £10,000 to your current account
3) Fee of £400 gets added onto that so you have £10,400 to pay over 29 months
4) Make minimum payments or setup however much you want to pay by direct debit
5) End of term pay it off or transfer it to another 0% interest free deal
6) Sit back and enjoy free money

Last time I did this was to bring down my mortgage interest rate. Was able to transfer 13k to my account. awesomeness

northernladuk
25th February 2014, 10:47
MBNA credit cards I am talking about - 29 month interest free with a 4% fee. Can transfer straight to account. Don't tell too many people about it though.....

I never get less than 8k on credit cards. I close down accounts before opening new ones.

Interesting. I had over 20k credit from MBNA back in the rate chasing days with 0% interest with no charge and used it to buy my first flat. It did indeed allow transfers to current accounts. I applied back to them many years later and they said no. Might have a look at that again if they have reverted back.

NorthWestPerm2Contr
25th February 2014, 10:48
Interesting. I had over 20k credit from MBNA back in the rate chasing days with 0% interest with no charge and used it to buy my first flat. It did indeed allow transfers to current accounts. I applied back to them many years later and they said no. Might have a look at that again if they have reverted back.

Here you go:

Money Transfer: Shift loans or overdrafts - Money Saving Expert (http://www.moneysavingexpert.com/loans/cut-loan-overdraft-costs)

northernladuk
25th February 2014, 10:53
Here you go:

Money Transfer: Shift loans or overdrafts - Money Saving Expert (http://www.moneysavingexpert.com/loans/cut-loan-overdraft-costs)

Might have a look at this. Tried get back in to rate chasing a couple of times over the last decade and it's just been a non starter due to the only people offering any decent length of time wouldn't allow transfers to current accounts and the credit limits were paltry. I still can't believe these will be much different but might be worth a further sniff.

NorthWestPerm2Contr
25th February 2014, 10:56
Might have a look at this. Tried get back in to rate chasing a couple of times over the last decade and it's just been a non starter due to the only people offering any decent length of time wouldn't allow transfers to current accounts and the credit limits were paltry. I still can't believe these will be much different but might be worth a further sniff.

Make sure you check your credit rating. Experian do a month free and give you a comprehensive overview. Unless your in the excellent rating then I would sort the issues out and then apply. Might take a few months for your credit file to get updated. Make sure to do things like close down unused credit cards and you are on the voting register. My rating is above 950 (1000 being the top), so I generally get offered large amounts of credit usually > 10k.

northernladuk
25th February 2014, 11:00
Make sure you check your credit rating. Experian do a month free and give you a comprehensive overview. Unless your in the excellent rating then I would sort the issues out and then apply. Might take a few months for your credit file to get updated. Make sure to do things like close down unused credit cards and you are on the voting register. My rating is above 950 (1000 being the top), so I generally get offered large amounts of credit usually > 10k.

I do this a number of times a year so no problems there. I always ask providers to write to to the credit check agencies to notify them of clearance immediately else it takes over a month to inform them and won't help.

Will tell you how I get on.

DirtyDog
25th February 2014, 11:07
Here is how it works:

1) Open credit card account.
2) Transfer e.g. £10,000 to your current account
3) Fee of £400 gets added onto that so you have £10,400 to pay over 29 months
4) Make minimum payments or setup however much you want to pay by direct debit
5) End of term pay it off or transfer it to another 0% interest free deal
6) Sit back and enjoy free money

Last time I did this was to bring down my mortgage interest rate. Was able to transfer 13k to my account. awesomeness

Make sure you make a note of when the rate ends and have it paid off before then. The deal will end before your statement comes through, and they clobber you if you are a few days late.

I fell for that one when stoozing was all the rage (before they started charging a transfer fee).

Dactylion
25th February 2014, 11:10
I Will tell you how I get on.

<Quick check to ensure this is General>
Please don't bother!
Jeeeezus H! WGAS! Seriously!

:wink

NorthWestPerm2Contr
25th February 2014, 11:11
Make sure you make a note of when the rate ends and have it paid off before then. The deal will end before your statement comes through, and they clobber you if you are a few days late.

I fell for that one when stoozing was all the rage (before they started charging a transfer fee).

Never had that happen to me in 10 years so even if it were to happen once it would be worth it for all this free money!

I always set a calendar reminder to transfer a month in advance of the 0% rate ending anyway.

d000hg
25th February 2014, 11:30
Here is how it works:

1) Open credit card account.
2) Transfer e.g. £10,000 to your current account
3) Fee of £400 gets added onto that so you have £10,400 to pay over 29 months
4) Make minimum payments or setup however much you want to pay by direct debit
5) End of term pay it off or transfer it to another 0% interest free deal
6) Sit back and enjoy free money

Last time I did this was to bring down my mortgage interest rate. Was able to transfer 13k to my account. awesomenessInteresting, so it's 0% on any use of the CC in the first 29 months. I thought the fee you were talking about was a % of the balance on the card you were transferring from.... but 4% in this case is just the "ATM fee" to take cash from the account? Actually, how does one even take money out of a CC account directly? Is it a special option when opening the account or can you just pull money out; I don't recall seeing such an option on my CC accounts in the past.

One point; you say
4) Make minimum payments or setup however much you want to pay by direct debitSurely if it's 0% there IS no minimum payment?

Dactylion
25th February 2014, 11:36
One point; you saySurely if it's 0% there IS no minimum payment?

What!!! Are you serious?
Interest free doesn't mean payment free FFS!

NorthWestPerm2Contr
25th February 2014, 11:36
Interesting, so it's 0% on any use of the CC in the first 29 months. I thought the fee you were talking about was a % of the balance on the card you were transferring from.... but 4% in this case is just the "ATM fee" to take cash from the account? Actually, how does one even take money out of a CC account directly? Is it a special option when opening the account or can you just pull money out; I don't recall seeing such an option on my CC accounts in the past.

One point; you saySurely if it's 0% there IS no minimum payment?

I think you are a bit confused here. The only purpose for opening this account is for transferring the money to your account. Once you have transferred it you then don't touch that credit card or use it for any other purpose (I'd suggest stashing it away somewhere or even cutting it up). There is always a minimum payment you have to make for any credit card - usually 1% or 2% of the balance. If you make any purchases on that credit card or actually withdraw cash from it then you will start paying large amounts of interest for those purchases and for the cash you withdrew.

d000hg
25th February 2014, 11:40
What!!! Are you serious?
Interest free doesn't mean payment free FFS!But isn't minimum payment calculated based on the interest and the outstanding balance?

d000hg
25th February 2014, 11:43
I think you are a bit confused here. The only purpose for opening this account is for transferring the money to your account. Once you have transferred it you then don't touch that credit card or use it for any other purpose (I'd suggest stashing it away somewhere or even cutting it up).Yes that's understood - but my question is how do you get £10k out of a CC account? I haven't seen such an option on my online CC banking accounts and I can't imagine you're suggesting taking it out as cash :)

NorthWestPerm2Contr
25th February 2014, 11:43
But isn't minimum payment calculated based on the interest and the outstanding balance?

well since it's interest free it means it is calculated on the outstanding balance! You answered your own question there! :yay:

NorthWestPerm2Contr
25th February 2014, 11:44
Yes that's understood - but my question is how do you get £10k out of a CC account? I haven't seen such an option on my online CC banking accounts and I can't imagine you're suggesting taking it out as cash :)

When you open up one of these specific accounts you simply log on and follow the instructions. 7 days later the money is in your account. That's all!

d000hg
25th February 2014, 11:46
well since it's interest free it means it is calculated on the outstanding balance! You answered your own question there! :yay:No I meant, isn't minimum payment based on balance * interest rate? Or do banks have to follow some rules that the minimum payment is always MORE THAN the interest, to stop you remaining in debt for ever?

NorthWestPerm2Contr
25th February 2014, 11:49
No I meant, isn't minimum payment based on balance * interest rate? Or do banks have to follow some rules that the minimum payment is always MORE THAN the interest, to stop you remaining in debt for ever?

Minimum Repayments credit cards - BEWARE!! - Money Saving Expert (http://www.moneysavingexpert.com/credit-cards/minimum-repayments-credit-card)

northernladuk
25th February 2014, 11:50
No I meant, isn't minimum payment based on balance * interest rate? Or do banks have to follow some rules that the minimum payment is always MORE THAN the interest, to stop you remaining in debt for ever?

The rules on on the page linked. The MBNA one for example says..


Min repayment: Greater of 1% of balance plus interest or £25

Just thinking about this. I have paid off 2 mortgages and started 3 in the last 12 months so am thinking my credit rating is going to be far too busy for their liking so might not be worth doing just at the moment.

NorthWestPerm2Contr
25th February 2014, 11:52
The rules on on the page linked. The MBNA one for example says..

Either way, I think you will all agree this is free money if done properly!

northernladuk
25th February 2014, 12:02
Either way, I think you will all agree this is free money if done properly!

On the face of it it would appear so, for the first 29 months at least. Christ knows what will be available in the future.

d000hg
25th February 2014, 12:05
So anyway, you get a loan for 1.65% for 2.5 years. If you don't need a loan, the purpose would be to make money off it, right?

Overpayment Calculator: Pay off your debt early... (http://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator) reckons an overpayment of £10k on my mortgage would save anywhere from £4-8k (I'd have to look up the exact term and interest rate it's on) if I didn't have to give it back :) I think it would reduce our payments by something like £40/month so over 29 months that's about £1190, for a profit of £760. Sticking it in an ISA doesn't seem like it would make that much.

Except of course to save £40/month, I have to pay £100/month (minimum repayment) so to make a profit of £760 over 3 years, my monthly expenditure actually goes up about £60.

Or I could take one day less holiday a year. It seems a bit convoluted for fairly small returns.. How much are you going to make - what's your plan OP?

NorthWestPerm2Contr
25th February 2014, 12:08
So anyway, you get a loan for 1.65% for 2.5 years. If you don't need a loan, the purpose would be to make money off it, right?

Overpayment Calculator: Pay off your debt early... (http://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator) reckons an overpayment of £10k on my mortgage would save anywhere from £4-8k (I'd have to look up the exact term and interest rate it's on) if I didn't have to give it back :) I think it would reduce our payments by something like £40/month so over 29 months that's about £1190, for a profit of £760. Sticking it in an ISA doesn't seem like it would make that much.

Except of course to save £40/month, I have to pay £100/month (minimum repayment) so to make a profit of £760 over 3 years, my monthly expenditure actually goes up about £60.

Or I could take one day less holiday a year. It seems a bit convoluted for fairly small returns.. How much are you going to make - what's your plan OP?

There are several things you can do with free money!

For example I am considering using it to take me down a bracket on LTV for my mortage which would save me significantly more than £760. Take into account the difference in interest between 3.5% and 2.5% for example....

Another option is to buy a car rather than pay the interest for finance....

DirtyDog
25th February 2014, 12:12
Either way, I think you will all agree this is free money if done properly!

If £400 is free, I'll have some of your money for free...

NorthWestPerm2Contr
25th February 2014, 12:14
If £400 is free, I'll have some of your money for free...

borrowing £10k over 29 months and paying £400 for it is as free as money gets these days when you take inflation into account.

yasockie
25th February 2014, 12:15
Another option is to buy a car rather than pay the interest for finance....

Ideally a highly deprecating sports convertible that you crash while drunk and high and end up unable to do contracting or your minimum monthly payments ;)
That's way more like 'general' to me :)

d000hg
25th February 2014, 12:17
Should a contractor be taking out a loan to buy a car? ;)

Remortgaging to get a different bracket seems a good scenario for this. But other than that, it's not really free money just a cheap loan. You still have to pay it back and so the benefit is only that it's cheaper than other loans, IF you needed another loan in the first place. I try as much as possible to live without needing debt (other than a mortgage).

Seems like for us, in our 2-year fixed mortgage deal, it's not a big help. I wonder if it would make sense to pay off the wife's student loan this way though.

NorthWestPerm2Contr
25th February 2014, 12:21
Should a contractor be taking out a loan to buy a car? ;)

Remortgaging to get a different bracket seems a good scenario for this. But other than that, it's not really free money just a cheap loan. You still have to pay it back and so the benefit is only that it's cheaper than other loans, IF you needed another loan in the first place. I try as much as possible to live without needing debt (other than a mortgage).

Seems like for us, in our 2-year fixed mortgage deal, it's not a big help. I wonder if it would make sense to pay off the wife's student loan this way though.

Look at your LTV ratio - if you are on say 65% it might make a big difference to go down to 60%. etc.

Well every contractor has a different financial situation. For example I am the only breadwinner in the family and have been so for 4 years now.... Maybe in future when Mrs is back in work things will be a lot easier... Mini NWP2C 2 is due in a couple of weeks.

d000hg
25th February 2014, 12:30
Look at your LTV ratio - if you are on say 65% it might make a big difference to go down to 60%. etc.Yeah, but not in a fixed deal with early-exit fees :) Something to bear in mind as we approach the end of that deal in a year - basically a tool to get the LTV into the next bracket earlier than we would normally.

I'll research student loan financials (the wife has an old-school one where you pay a fixed amount if you earn over a threshold, not a % of earnings IIRC).

northernladuk
25th February 2014, 12:31
Look at your LTV ratio - if you are on say 65% it might make a big difference to go down to 60%. etc.

Well every contractor has a different financial situation. For example I am the only breadwinner in the family and have been so for 4 years now.... Maybe in future when Mrs is back in work things will be a lot easier... Mini NWP2C 2 is due in a couple of weeks.

I don't think I would be using a credit card like this on something that has a tie in. You could get seriously screwed if you can't get the money out quick. Only takes one payment missed and your 0% becomes 20% and there is f all you can do about it.

Having an offset mortgage makes it very useful.

You selling the BMW then?

NorthWestPerm2Contr
25th February 2014, 12:33
I don't think I would be using a credit card like this on something that has a tie in. You could get seriously screwed if you can't get the money out quick. Only takes one payment missed and your 0% becomes 20% and there is f all you can do about it.

Having an offset mortgage makes it very useful.

You selling the BMW then?

Buying a new one.....

this is the one I have my eye on:

BMW 3 SERIES 330d M Sport 4dr Auto 3.0 (http://www.autotrader.co.uk/classified/advert/201402141803641)

d000hg
25th February 2014, 12:42
I don't think I would be using a credit card like this on something that has a tie in. You could get seriously screwed if you can't get the money out quick. Only takes one payment missed and your 0% becomes 20% and there is f all you can do about it.

Having an offset mortgage makes it very useful.

You selling the BMW then?I was thinking that if you are routinely over-paying your mortgage, doing this effectively just gets you maybe 1-year ahead on your overpayments... then later that year you keep the £10k dividend you would have overpaid in savings to pay off the CC. You're simply moving everything forward 6-12 months which could, based on the timing of your mortgage fixed period, be of use.

I agree it all seems a bit fiddly though.

bobspud
25th February 2014, 19:16
Managed to get my nice shiny merc on interest free credit! :)

Yes sure it's a false economy to save 10k on interest on something that will lose 50k in the term of the loan but hey I figured that I'd have spent 50k on a 3 year old one then dumped that after 3 to buy the one I have now this way I just keep the same car for 6 years and spec'd it to the hilt rather than the crap you get normally. :)

NorthWestPerm2Contr
25th February 2014, 22:11
Managed to get my nice shiny merc on interest free credit! :)

Yes sure it's a false economy to save 10k on interest on something that will lose 50k in the term of the loan but hey I figured that I'd have spent 50k on a 3 year old one then dumped that after 3 to buy the one I have now this way I just keep the same car for 6 years and spec'd it to the hilt rather than the crap you get normally. :)

Wtf would you spend 50k on a 3 year old merc!?!? It depreciates half the value in 3 years and I really doubt you will spend 25k maintaining it for 3 years unless you want to change all its parts every service!

bobspud
25th February 2014, 22:25
Wtf would you spend 50k on a 3 year old merc!?!? It depreciates half the value in 3 years and I really doubt you will spend 25k maintaining it for 3 years unless you want to change all its parts every service!

Mercs go from 20 to 200k I can assure you that the comfortable ones are not 20k new ;)

AtW
25th February 2014, 22:33
Buying a new one.....

this is the one I have my eye on:

BMW 3 SERIES 330d M Sport 4dr Auto 3.0 (http://www.autotrader.co.uk/classified/advert/201402141803641)

2006, hardly new but could be a good deal...

AtW
25th February 2014, 22:34
Managed to get my nice shiny merc on interest free credit! :)

SL 63? :wink

bobspud
25th February 2014, 22:53
SL 63? :wink

Not sure what you would do with the extra power in the new AMG 63 The newer smaller engines are unexpected to say the least. :) but yes the SL is very comfy regardless of engine :D

AtW
25th February 2014, 22:55
Not sure what you would do with the extra power in the new AMG 63 The newer smaller engines are unexpected to say the least. :) but yes the SL is very comfy regardless of engine :D

Power to the people...

DirtyDog
27th February 2014, 12:29
Thinking of getting a comfy contractormobile and while I have the money there I want to keep my warchest healthy in case of downtime. I had a look at the latest bank transfer credit cards on offer and I was :eek: shocked. 29 months @ 0% with a 4% fee. That works out at 1.65% APR. is that not classified as free money?!

Looks like the cheapest loan one can get.....

Is this not symptom of the same disease we had before the crash?

Barclaycard are offering 31 months at 0% plus 2.99% transfer fee

Nationwide are offering 26 months at 0% but only 0.75% transfer fee

d000hg
27th February 2014, 12:32
Barclaycard are offering 31 months at 0% plus 2.99% transfer fee

Nationwide are offering 26 months at 0% but only 0.75% transfer feeThat's a fee for transferring existing CC debt, not a "withdraw cash" fee.

NorthWestPerm2Contr
27th February 2014, 13:14
Barclaycard are offering 31 months at 0% plus 2.99% transfer fee

Nationwide are offering 26 months at 0% but only 0.75% transfer fee

I guess you could buy something on CC e.g. a car and then transfer it to Nationwide - that's free money when you take into account inflation.

doodab
27th February 2014, 13:31
But isn't minimum payment calculated based on the interest and the outstanding balance?

It's normally a %age of the outstanding balance that is slightly more than the %age they charge as interest i.e. 2% when monthly interest rate is 1.5% or similar. Some are 5%.

northernladuk
27th February 2014, 14:09
SL 63? :wink

Interesting you say that. I bid on a private reg from the DVLA yesterday. A63 AMG. Went for around 8K in the end. Not a chance I was paying that. I withdrew my 900 quid bid in disgust.

northernladuk
27th February 2014, 14:10
I guess you could buy something on CC e.g. a car and then transfer it to Nationwide - that's free money when you take into account inflation.

It's more than likely you will get charged 5% for using a credit card. The seller will get charged that by Visa so he isn't going to swallow it.

d000hg
27th February 2014, 14:10
I guess you could buy something on CC e.g. a car and then transfer it to Nationwide - that's free money when you take into account inflation.Fair point, if you have another card with the spare capacity this would be cheaper than opening a CC to take all the money out as a loan.
More risky though, in case you suddenly find you can't get approved for the new CC after putting 10k on one which isn't 0% :)

doodab
27th February 2014, 14:24
Fair point, if you have another card with the spare capacity this would be cheaper than opening a CC to take all the money out as a loan.
More risky though, in case you suddenly find you can't get approved for the new CC after putting 10k on one which isn't 0% :)

The sensible approach would be to wait for the 0% balance transfer one to be approved before spending the money on the other card.

If you have several cards it's a useful trick for managing cashflow. When I moved back to the UK from Germany I was fairly skint so I put almost all of my spending on a CC and transferred it to another 0% one. It cost the 3% transfer fee or whatever but that enabled me to stockpile cash for the warchest very quickly.

Ticktock
27th February 2014, 14:26
It's more than likely you will get charged 5% for using a credit card. The seller will get charged that by Visa so he isn't going to swallow it.

I bought my car on my credit card and didn't get charged any extra. Even worse for the seller, I did it in 3 separate transactions - deposit followed by the balance in 2 halves, clearing the card off in between each payment. The only reason I did that was because I wanted the rewards from the spend on the credit card, rather than just handing cash over / doing a bank transfer.

d000hg
27th February 2014, 15:33
It's more than likely you will get charged 5% for using a credit card. The seller will get charged that by Visa so he isn't going to swallow it.Hmm. Other than councils and online booking fees, the only places I see charging a premium for CC payments are crappy shops like £-stretcher. Is that where you do all your shopping NL?