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some advice needed RE: my credit card!?


wannabe_keeper
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As others have suggested get a 0% credit card for purchases, best ones (i.e longest introductory period) can be found here:-

 

http://www.moneysavingexpert.com/cards/best-0-credit-cards

 

Credit cards are nothing scary if you use them correctly. My current credit card has a -3.35% (negative) interest rate (£5,300 "debt" at 0%, which is mirrored by £5,300 "cash" in an ISA account paying 3.35% interest) and how I've done that is I've put all of my usual spending on the credit card (so petrol, food, clowncil tax, clays and carts, etc until I've maxed out the card) and put the cash what I would of spent in the ISA, mirroring the "debt" on the credit card. This method requires dicipline so making the mininum payment (1% of the outstanding balance) +£1, making the payment on time, and paying off the card with the "savings" before the 0% ends. At the end I end up with the interest earned off the free credit, plus loads of points I can redeem for vouchers, experiance days, etc

 

more info here

http://www.moneysavingexpert.com/cards/stooze-cash-credit-cards

 

Other uses for 0% credit cards are paying off insurance in 1 go so you're not paying the daft rates when paying insurance monthly, and do what you're about to do. I personally would put the whole £2,500 on a 0% credit card (if you can get a limit that high), put the £1,700 in a ISA, and simply make sure you have at least £2,500 by the time the 0% ends to pay it off, you've earned interest off a purchase, instead of paying interest on a loan, plus it increases your credit worthiness (handy for a mortgage application in the future, etc). This will only work if you make at least the min payment +£1 every month, and on time, and for gods sake make sure you have £2,500 in the ISA by the time the 0% ends so you can pay it off, otherwise you'll either be paying the hideous interest rates, or have to balance transfer to another 0% card (which incurs a fee of around 1%)

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Back in the days of 5%+ interest accounts I used to do a similar thing. If you turn over a fair amount of money you can actually make a fair chunk.

 

My mistake was going through a silly phase and spending it all (very stupid). I've given the credit card companies a fortune so now I'm back on track I'm going to start the whole routine again without being a **** to get some back. The only reason I'm not doing it now is because the interest rate is so awful it's hardly worth the bother for the return.

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Definitely DO NOT get someone to apply for a loan on your behalf as someone suggested. That is pretty serious fraud!

 

 

 

 

 

 

 

So if my dad got a loan for let's say £800 and gave me the money to buy a car, then I paid my dad the loan payments, that would be a serious fraud?

 

Really? :hmm:

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Yes, because the loan isn't for him, its for someone else. He has lied in order to get the loan.

 

J.

 

Where's he lied?

 

'Hello Mr bank manager, I'd like an £800 loan please'

 

'Certainly sir, and what would the loan be for?'

 

'I want to buy my son a car'

 

'That's not a problem sir...just sign here, here and here'

 

'Thank you Mr bank manager, you're a very nice man'

 

'No problem sir, you can use our personal loans for all sorts of things...home improvements, holidays, a new tv, in fact as long as it's legal, pretty much anything you like. Have a nice day sir.

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It might be rather stupid to apply for a loan, then lend it to someone uncredit worthy but unless the loan agreement states you are not to give the money to someone else (pretty pointless loan if you cant do anything with the money other than count it)..... but it isnt serious fraud....

 

Applying for a mortgage then using the money not to buy the house but spending it on cars, clothes etc could be fraud (thats why banks dont give you the money directly!)

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It is serious fraud because the applicant isn't the true benificiary of the money and he never intended that he would be. It's the offence of 'obtaining a pecuniary advantage by deception' which carries a maximun of 14 years, I think. You are trying to decieve the lender as to the purpose and desitination of the money. Think about it; there is a reason as to why person A wouldn't get a loan so person B is applying for it to decieve the lender as to its true purpose.

 

J. .

 

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It is serious fraud because the applicant isn't the true benificiary of the money and he never intended that he would be. It's the offence of 'obtaining a pecuniary advantage by deception' which carries a maximun of 14 years, I think. You are trying to decieve the lender as to the purpose and desitination of the money. Think about it; there is a reason as to why person A wouldn't get a loan so person B is applying for it to decieve the lender as to its true purpose.

 

J. .

 

Need to update your law books...

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To add to the above' they always ask you what the loan is for. So, if you told then you are going to give it to someone else to buy a car with then that's fine. Of course, they wouldn't give you it if you said that so if you said something else you are decieving them.

 

J.

 

Guest1957,

 

Care to offer an explanation as to why I'm wrong then?

 

J.

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Think about it; there is a reason as to why person A wouldn't get a loan so person B is applying for it to decieve the lender as to its true purpose.

 

J. .

Who said anythign about deception.............. person A often wont get a loan thats why banks insist on guarantors! As long as they have someone who is willing to service the debt and they can sue or have a charge against property they can reposes they honestly care what you borrow it for.....

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To add to the above' they always ask you what the loan is for. So, if you told then you are going to give it to someone else to buy a car with then that's fine. Of course, they wouldn't give you it if you said that so if you said something else you are decieving them.

 

J.

 

Guest1957,

 

Care to offer an explanation as to why I'm wrong then?

 

J.

 

Two issues:

 

1) the offence you name has not been on the statute book since 2007.

 

2) there is no problem unless the bank is deceived with regard to the purpose of the loan. If it were a loan given under a strict purpose and this was no adhered to then there might be fraud and a resulting quistclose trust.

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Ah, but now you are changing the argument! Having a guatantor is most certainly not what we are talking about. In that case the loan is not in the guarantors name. We are talking about getting someone else to apply for a loan on your behalf withing telling the lender of your involement. That is fraud.

 

J.

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Yes, because the loan isn't for him, its for someone else. He has lied in order to get the loan.

 

J.

 

That's irrelevant it's not fraud he is getting a loan then lending the money. He remains entirely liable for it what he does with the money is up to him

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Back in the days of 5%+ interest accounts I used to do a similar thing. If you turn over a fair amount of money you can actually make a fair chunk.

 

My mistake was going through a silly phase and spending it all (very stupid). I've given the credit card companies a fortune so now I'm back on track I'm going to start the whole routine again without being a **** to get some back. The only reason I'm not doing it now is because the interest rate is so awful it's hardly worth the bother for the return.

 

Very true I can't wait for the return of 8%+ savings and 0% super balance tranfers however having a credit card at -3.35% and being able to claim free scuba diving experiance days for 2 can't be too shabby :)

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Hi Guys,

 

Bit embarrassing to ask but i am only 22 and have just received my first ever credit card in the post. I have read through it but i just wanted some advice on something i was planning.

 

I want to buy a Suzuki Jimny for £2500 and i can stump up about £1700 of my own money and was going to use my credit card for the rest (£800 or so). My limit on my credit card is £1500. If i was to use say £800 - £1000 on my credit card in one lump sum and pay off say £50/month will this be okay? I cant see anywhere about how much the minimum payments are in relation to how much you borrow.

 

Is this a stupid idea as will i be paying off a vast amount in interest over say a year or 18 months it would take to clear the balance?

The APR is 23.9% variable but this means little to me as i have only ever used my current account since i was 16 :innocent:

 

Sorry to come across naive and as if i am aged about 11 but any help would be great :good:

 

Thanks in advance,

Harry

Edited by unapalomablanca
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Best bet is to use your card for a few months for SMALL purchases - buy your groceries on it and pay back 80% of the amount at the end of the month, do the same again for a few months and then clear off the balance. This will build you a credit rating and you'll then be able to apply for a loan to finance your motor. Don't use the card for a big purchase.

 

You saved me a job typing. This is exactly what you do but be careful not to fall into the credit card trap of buy now pay later. For me mine was 11 years later, I finished clearing it last September. Never again. Great for building up credit history but really bad value for money for long term.

 

Just seen your post, lol, congradulations!

 

still worth building some credit history for if or when you want a mortgage.

Edited by reddan
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car looks nice, and well done not using the credit card, if I was you i would cut the car up so you can't use it.

 

Wish i had done that but didn't now I have massive credit card debt.

 

Think this is a small typo but in the context of this post, having just bought it that would be a bad idea.

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Thanks for all the advice... the change will go towards some off road tyres and a nice new lamp :yes:

 

well done you! and you still have £200 cash left :good: i suggest you spend it on all the lads that gave you good advice on here! enjoy your wee jimmy! P.S. mines a pint of lager :drool:

 

If only you were nearer id take you out for a lamp round ;)

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