Need advice on finance option.

J

jarvis

Guest
Hi

I know there are other threads but my question is specific to me.

I'm about to buy a car and need finance of €7000 to complete the purchase.

I have looked online at the various bank's interest rates and they all seem a little high. 11.46% being the cheapest.

My dilemma is this.

I have an MBNA credit card with little or no outstanding balance and a €15K limit. The interest rate on this is 10.9%
They are offering 0% interest on cash transfers till Jan 2011, then it will revert to 10.9%

Is this the best way to go as it's lower interest rate, I will have more powerful bargaining with cash and the repayments will be very flexible.

I plan to set a DD each month to clear it over 5 years.

Anyone any suggestions as the best way to go?

Anyone know how to work out the total amount repayable/cost of interest?

Anyone completely against doing this? and why?

Thanks in advance.
 
Not at all, don't buy with the credit card.
You have the card already so the 0% transfer does not apply,
Interest will be added every month and then the next months interest will be on the entire amount.
Are you a member in a credit union if so check them out as they have competitive rates.
 
Thanks for the reply niceoneted,
I'm not switching cards, this is a promotion that MBNA offer if you want to transfer a sum of money to your current account, the 0% most definately does apply.

In relation to your comment re the interest, is an interest rate not the same weather it's a bank or a credit card company??? Surely I can only be charged interest on an outstanding amount?
Anyone else know how this works?
Anyone able to work out total repayable with the Credit Card, taking the 0% into account compared to a bank loan over 5 years @11.46%???
 
Jarvis

You mentioned buying for cash. That would mean drawing out cash with your CC. I think there is a penal interest on that also.
 
Hi sidetracker,
I said in my original post that they are offering a special offer on cash transfers.
This is where they move cash from your card into your current account. This sum of money is interest free till Jan 2011 and then 10.9%
it is nit the same as a cash withdrawal at an ATM.
 
I didn't realise that they transferred the money to your current account for you to use I thought you meant that if you transferred an amount to them with a new CC that the interest was 0% for the first 10 months.
Not a bad idea so and you could pay as much as possible off it then perhaps look for a personal loan for the remainder - which might be hard as then you would be looking for a loan to clear a CC and not buy a car.

have a look at this thread though - you would not want to use the CC for anything else.
http://www.askaboutmoney.com/showthread.php?t=136371
 
Yeah I could look at a personal loan down the line or a new credit card that offers interest free on balance transfers. Then switch the debt around to avoid as much interest as possible. Will read that thread now. Thanks.
 
If the interest rate on offer from MBNA (10.9%) is lower than the banks are offering (11.43%) and you also get an interest-free period then I don't see how it couldn't be cheaper, unless I'm missing something? Also you could transfer to 0% on another card in January if there's one available.
Sybil
 
Mrs Vimes said:
If the interest rate on offer from MBNA (10.9%) is lower than the banks are offering (11.43%) and you also get an interest-free period then I don't see how it couldn't be cheaper, unless I'm missing something? Also you could transfer to 0% on another card in January if there's one available.
Sybil
Click to expand...


Yeah, Plan to switch to another card at 0% if available, then back to MBNA for more 0% if available as it regularly is or get a personal loan down the road.
Applied to a bank also that was quoting the 11.46% but when it came to the application it was actually 12.1%!!!!!
 
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