Taking cash out of credit card?

Because of circumstances working out the way they have I'm short of money until the beginning of January, at which time I'll be getting a big cash injection. I was thinking of taking some cash out of my credit card to pay off my living expenses(rent,food etc) until January, when I'll then pay off this small credit card 'loan' in full. I've always paid off my credit card bill in full after every month since I got it in 98, and I've never used it to buy anything over 400. So using my card in this way by taking out a couple of grand in cash is something I've never done before. I also have a perfect credit history. Will my bank make any objection to this course of action? Basically I'll be living on credit until January so I'm not sure what they'll say.

TIA

In message , GSV Three Minds in a Can writes

No, dont go for a personal loan, go for an overdraft and pay interest for the money as you need it. Also, if the guy has no income then he isnt going to get a personal loan because he cant afford the monthly payments.

Bitstring , from the wonderful person john boyle said

Hmm, I guess I considered a personal loan to be pretty much the same thing .. maybe it depends on your local bank-speak? Anyway, the bank manager should be able to advise on best, cheapest, and safest option. If the OP has any sort of assets at all, then a secured loan might even be possible - I've had bridging finance from my bank manager under similar circumstances ('you can have it back If/when I sell X') in the past at pretty attractive interest rates.

In message , GSV Three Minds in a Can writes

No, a personal loan is a loan, i.e. the bank gives a wodge of dosh and you pay it back in set monthly instalments, just like a 'mortgage'. You pay interest on the whole amount borrowed on the loan, even if your current account is in credit.

An overdraft is when they let you take more out of your account than you have in it. They agree with you that you will get the account back in credit by a set date. Your balance can go up and down at will, just so long as you dont go over the pre-agreed limit. Interest accrues on a daily basis on the amount owed on the day, i.e. you only pay for the dosh as you use it. More importantly there are no monthly payments, you just must be back in credit by the agreed date. The APR is competitive, expect to pay about 7 - 8% but in effect this is cheaper than an equivalent loan because you will only pay interest on the actual amount you are overdrawn.

No, for two reasons. 1) A proper bank 'manager' wont see small fry like this case, The OP will see a pretend 'manager' who is really a salesperson.

Yes, but lending against security is a different thing and I dont think you mean 'any sort of assets at all'. I think you mean 'A house with sufficient equity', which for a high street bank and in the case of a second charge means ((House Value *2/3) - existing mortgage).

Which, if your credit record is normal, would be a good option as you can transfer to a bank account. Egg & MBNA spring to mind, as allowing you to do this. Previous mention of this here -

Daytona

For a time it was the case (I don't know whether universally, but certainly with RBS) that you had to pay "interest" (by a different name, of course, something like facility fee) on an overdraft agreement even before you actually went overdrawn. Meanwhile they seem to have gone off the idea, and now only charge you interest as&when. IIRC the facility fee was of the order of half the borrowing rate, and was for a year, after which the facility could be renewed or terminated. So if you wanted a 6 month overdraft, you actually had to pay half rate for the whole year just for the facility, plus whole rate for half the year for the actual borrowing.

I still have a £4k overdraft "available" from about 3 years ago when I was going to buy a car with funds I paid in by cheque from a 3rd party. "Can I draw against this tomorrow?" I asked as I paid it in, having made a special trip to the account holding branch instead of a more conveniently located branch. "No, Sir, you'll have to wait until it clears." No attempt was made to suggest an alternative solution to my problem, so I wondered "What about a temporary overdraft, then?" - "Why of course, Sir, no problem, just have a seat while I get some forms for you to sign."

The car was paid for by Switch, but the "temporary" overdraft facility seems never to have been cancelled. Fortunately it isn't costing me anything.

So really the OP was right. He can waste his time going to his bank, being charged insurances and arrangement fees, with a degree of head-shaking "Ooh, I'm not sure if we can do that." With questions about exactly why he has landed in that position.

Or he can draw a few hundred out of his credit card as he needs it. He could even do it from an autoteller if he has the pin number. If he is with a company with a decent rate on its credit card he could be paying the grand sum of 25 or thereby a month on the full 2000.

The only downside is he should make sure he makes the minimum payment on his card every month and he is likely to be charged a cash advance fee, of maybe

That way he doesn't have to explain himself to anyone, the next 4/5 months will cost him around 150 and if his big cash injection in January is big enough he'll hardly notice it.

Neb

In message , Nebulous writes

I agree, n fact if he just uses his card for every purchase he should only need a very small amount of cash.

In message , Ronald Raygun writes

Yes, 'arrangement fees, were common but I have never heard of them being as expensive as this. I.e. half todays rate would be 4% whereas IME half a percent or a flat £100 is more the norm.

"Ronald Raygun" wrote

I asked for a "temporary" (just for a couple months) overdraft from my bank

"Nebulous" wrote

At 9.9%, it'd be around 16pm...

"Nebulous" wrote

... so it could be as low as around 70 for 4/5 months.

"john boyle" wrote

I don't think there is always an "agreed date" with an overdraft...

There isn't. Lots of people (like me for example) have an overdraft limit set on their account that just stays there for ever. The bank is quite happy to make money by charging interest when I'm overdrawn and knows (presumably) that they can't sell me a personal loan.

A little piece of advice about a "temporary" overdraft from personal experience. With a "temporary" overdraft, your bank holds the right to remove it at anytime!!!!

I had one myself, I'm with HBOS and they removed it with no warning at all and ended up almost £1,000 in debt.

It will be shortly paid off thank goodness. So, to sum it up. Make sure your account is in balance and keep your switch card for emergencies only. You can't go unauthorised if you actually pay in cash. As for credit cards "I don't believe in them and don't want one."

Bitstring , from the wonderful person john boyle said

Actually IIRC it was some shares in a company stock option plan, or (on one occasion) some BES holding, which were tied up for a number of years for tax reasons.

It may well have been less, as you say, but was definitely renewable annually. Mind you, I guess you had to pay the annual amount even if you only needed to use the facility for a small number of months, which of course makes the effective annual rate more.

Not too long ago, I'd say more than 5 but less than 10 years.

I was adding in the cash advance payment as well, though as John Boyle has pointed out you can pay most things on the card and not need to draw cash.

Very few cards charge as little as 9.9% and he didn't tell us what his existing card is.

Neb

"Nebulous" wrote

Ah, but you said "If he is with a company with a decent rate"...

In message , Tim writes

Thats true, in fact before the nanny nanny ann robinson namby pamby consumer watchdog state interference blame protection big brother world we live in now, most overdraft facilities were arranged without the clients knowledge, they were just tacit agreements. Now they are formalised agreements many of which, as you say, are continuous agreements. In this case it appears to be short term facility that is required and a prudent banker (does one exist these days?) would put in a 'review' date at least.