barclays or abbey

'Barclays boss Matt Barrett told astonished MPs that he didn't borrow on credit cards as it was "expensive" and no way to fund "chronic borrowing".'

cd

OTOH, Barclaycard offers an extra year's guarantee on most goods purchased with it, and doesn't cost a bean if you pay it off at the end of each month (which is the only smart thing to do with a credit card anyway).

Best Regards, Alex.

i can confirm abbey national cards are run by MBNA

And he's absolutely right.

We found Abbey National very inefficient. I haven't use Barclays for a while. We've been very happy with Nationwide.

"Alex Butcher" wrote

Nope - surely an *incredibly* "smart thing to do", is to take them up on their offer of 0% on balance transfers - and transfer to the highest-paying savings account you have access to!! ;-)

Out of interest, how would you do that? Cash advance/credit card cheque from one card, then transfer the balance to a 0% CC?

Best Regards, Alex.

highest-paying

"Alex Butcher" wrote

I am aware of (at least) two CCs which allow "balance transfers" directly to a standard bank account (supposedly to pay off an overdraft, but there's no requirement that there's actually an overdraft on the account already!).

You need to check with the particular CC concerned as to how best to make the transfer - a strict "cash advance" may incur extra charges so you'd want to steer clear of those (this happens sometimes on CC cheques too).

You can always "bounce" a balance transfer from a CC which doesn't allow direct transfers to bank accounts, to another CC that does, then on to your bank account....

That's what I was thinking; the cash advances and CC cheques I've seen from MBNA start accruing interest immediately.

Best Regards, Alex.

And the typical 1.5% - 2% cash advance charge on that account would eat up any interest you would make on the deal.

"Jonathan Bryce" wrote

Which is why you only do it with cards that *don't* charge the extra 1.5-2% !! :-)

"Alex Butcher" wrote

It's not the "pay interest from day 1" factor you need to worry about - an extra few weeks interest at 0% APR is still no interest! - it's the charges of the sort of "2% of amount transferred" you need to steer clear of.

"Tim" wrote

Although an effective tax-free return of (say) 4.5%pa for 6 months (around

2.25% overall) would cover most "1.5-2%" charges and still leave a little profit anyway....

Well, the best 6 month fix I can find is 4%, which I make as 1.98% over 6 months.

If you found a card that charges 1.5% on the cash advance, that would make you £14.40 on the deal if you used your cash ISA allowance for the year. Subtract from that the cost of postage / telephone calls etc. Look at how long it takes you to organise it and consider whether or not you would be better off spending the time working for the money.

Most of my card cos have written to tell me that they are increasing the cash advance fee to 2%, not that I care because if I want cash, it comes out the current account.

"Jonathan Bryce" wrote

You are obviously not doing it right!

Your calc: ((1.04^0.5-1) - 0.015) x 3000 = 14.40. Not worth the trouble. My calc: (0.045 x (6/12) - 0.0) x 15000 = 337. Even 2 hour's work makes you over 160 per hour, *tax free*!! (equivalent to 280ph to HRTP) [I don't know how much money *you* earn per hour, but I have trouble making that much over 250ph gross... ;-) ]

First: use a card that does *not* charge a (1.5, 2%) fee for balance transfer. Next: don't use an ISA - you can't save enough there. Use an offset mortgage - mine currently has a rate of 4.5% (if interest rates do rise in the next 6 months, then it's even better!).

... and even if you *do* need to pay a 1.5% fee: (0.045 x (6/12) - 0.015) x

15000 = 112. If you think that it's not worth over 100 to do a quick application form & telephone call, then you must be earning a huge amount of money - so good luck to you, carry on with that instead.

"Jonathan Bryce" wrote

Don't use a "cash advance with fee" - use a "fee-free balance transfer".

Well, I don't have an offset mortgage because I don't earn enough to be able to buy a house, so ISAs are my only source of tax free interest.

What I didn't include in my calculations is the fact that I can save more than my ISA allowance each year without the need to borrow it on credit cards.

My calc would then become ((1.032^0.5-1) - 0.015) x 3000 = £2.62. I could do it with bigger sums - £15k would bring it up to £13.11, but still not worth the hassle.

Oh, and the minimum repayment of 2%-3% per month would reduce that a bit.

"Jonathan Bryce" wrote

Then why don't you do it with a card that will *not* charge you a fee??

Even your latest calc would become (adjusting to the 15K you said you could do) :- ((1.032^0.5-1) - 0.0) x 15000 = 238.11.

If you can do without the extra 238 you'd get, will you please send it to me instead? :-)

"Jonathan Bryce" wrote

There is a card out there where the minimum repayment each month would be only *5* (five pounds), even if you make a large balance transfer - as long as you do not make any further transactions on the card for those 6 months.

Your balance of 15,000 would only reduce to 14,975 (still over 99.8% of initial balance).

Next problem??