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Using free money from BT?

Discussion in 'Accounting & Tax' started by benk, 6th Feb, 2016.

  1. benk

    benk Member

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  2. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    The flaw is that the 0% interest only applies to a balance transfer.

    Using your CC to pay off your mortgage is a cash draw-down, which in most cases is charged at full interest. In many cases cash draw-downs even ignore the 55 day interest free period.

    This effectively uses an 18% credit card to try pay off a 4.5% mortgage.

    There might be some cards that aren't subject to this, you'd have to read the (very fine) print.
     
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  3. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Reading a bit close, the poster is first drawing credit card A, which will incur interest. He then uses credit card be to do the balance transfer on 0% interest.

    It might actually work...
     
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  4. Hodor

    Hodor Well-Known Member

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    I only know one person to do a balance transfer. You could only transfer 70-80% of the outstanding balance (limit wasn't the problem) is this common or unusual? Could leave you stuck with a portion at high rates
     
  5. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    There are a few threads on this here already.

    I did it once when I bought a car. It all went fine for months until I accidently was later with a payment.
     
  6. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    can have credit score implications depending on the quality of your file to start with

    ta

    rolf
     
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  7. benk

    benk Member

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    Thanks, I understand there is a degree of risk to it (ie forgetting payments and can affect credit ratings) but that all seems controllable to me. Would this be considered "parking borrowed money in an offset"?
     
  8. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    It won't matter as long as you are not trying to claim any interest on the card and have no existing borrowed money in the offset.
     
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