Interest free credit card for balance transfer

[RazzaDazzla]

I have a mate with some $20,000 worth of debt in personal loan and credit cards.

He earns some $100,000 p.a.

I am suggesting to him that he takes advantage of a credit card with low or interest free for some period of time.

anyone know of any credit card companys with any deals on at the moment for zero or low interest for balanace transfers for x period of time?

He will not be making any new purchases on this credit card, he will simply be using it as a tool to knock over his debt.

Cheers

 

[Stan 101]

Hi, there was a post on this some time back. I refuted the claims that banks and the like would turn over for cash straight up on the credit card.

I was poo pooed for the claim... I then created a post asking for info on same when a friend had gone berzerk... I do not believe I recieved a response..

Your best best is www.infochoice.com.au in my not so humble opinion..

 

[gav]

I'd be curious as to why he'd have those kind of debts in the first place if he's on $100K ?

 

[theasxgorilla]

Hi, there was a post on this some time back. I refuted the claims that banks and the like would turn over for cash straight up on the credit card.

I was poo pooed for the claim... I then created a post asking for info on same when a friend had gone berzerk... I do not believe I recieved a response.

I'm not sure what you're describing here exactly but the way it can work (and I know because I've done it several times) is that you go to a bank who has enough cash on hand to allow you to cash advance the maximum on your current card. Don't pull it through the wall, go into the bank and draw it out in one hit. If you're planning to pull 20k don't just rock up, unless it's a major branch they will claim they don't have the cash to give you.

Then when your new card provider does the balance xfer they'll xfer as much of that 20k as the limit on your new card will allow...hopefully the lot. If not, deposit the remaining cash and use it to zeroise the balance of the old card.

And there you have it...voila...20k interest free (or low interest...even lower than a mortgage equity redraw) for 6 or 12 months.

 

[Julia]

I'd be curious as to why he'd have those kind of debts in the first place if he's on $100K ?

Yep, the same question occurred to me.
Woolworths have been advertising a new, interest free credit card.
I know nothing about it.

 

[Boggo]

I am suggesting to him that he takes advantage of a credit card with low or interest free for some period of time.

anyone know of any credit card companys with any deals on at the moment for zero or low interest for balanace transfers for x period of time?

Cheers

2.9% for 12 months here
http://www.citibank.com.au/AUGCB/AP...th=/prod/det/cards_gold.htm&tabId=CreditCards

 

[theasxgorilla]

I'd be curious as to why he'd have those kind of debts in the first place if he's on $100K ?

Maybe he poured money into superannuation while using the credit card to finance a renovation project which he eventually sold for a profit without paying a cent of capital gains tax but in the meantime during the sales process and settlement he wanted to refinance the debt at the lowest rate possible...judge not lest ye...:.

 

[RazzaDazzla]

I'd be curious as to why he'd have those kind of debts in the first place if he's on $100K ?

Hahaha trust me, that's the million dollar question all his mates ask him. No, there's no gambling, drug or sex addiction, just a complete lack of money management that has compounded itself over the years.

Eg. of such mismanagement include receiving six (6) overdrawn/dishonour fees in a month on his CBA streamline account at $30 a hit! That's $180 in November alone for not ensuring he has enough cash in his account to cover his direct debits etc.

 

[RazzaDazzla]

I'm not sure what you're describing here exactly but the way it can work (and I know because I've done it several times) is that you go to a bank who has enough cash on hand to allow you to cash advance the maximum on your current card. Don't pull it through the wall, go into the bank and draw it out in one hit. If you're planning to pull 20k don't just rock up, unless it's a major branch they will claim they don't have the cash to give you.

Then when your new card provider does the balance xfer they'll xfer as much of that 20k as the limit on your new card will allow...hopefully the lot. If not, deposit the remaining cash and use it to zeroise the balance of the old card.

And there you have it...voila...20k interest free (or low interest...even lower than a mortgage equity redraw) for 6 or 12 months.

Not a bad idea. I believe the Citibank credit card allows you to transfer balances of personal loans as well.

Also, this mate i'm helping, he's not the kind of guy I would want to see walking the streets with large somes of cash on him! Chances are he would be walking down the mall with a hole in his pocket with $100 notes falling out as he walked!

 

[prawn_86]

And there you have it...voila...20k interest free (or low interest...even lower than a mortgage equity redraw) for 6 or 12 months.

Very smart ASX.G. Im impressed

 

[skc]

I have done this multiple times during the high interest era... you can put the 20K in a term deposit earning 7-8% whilst doing minimum repayment on your low intro rate credit. Citibank once even offered ReadyCredit (line of personal loan, not a credit card) which allowed you to cash advance at 2.9%... crazy times.

The lower interest rate in deposits these days don't really justify the plan as much, but putting low interest money in your home loan offset could still be worthwhile.

But the key is good self discipline to make sure you don't spend the cash you think you have

 

[Adam A]

Im pretty sure that balance transfers dont apply to cash advances?

 

[1080p]

Im pretty sure that balance transfers dont apply to cash advances?

You're right. Cash advances are also not included in any interest free days which means you are charged at the standard variable interest rate as soon as you withdraw the cash.

Also if you then use the card for purchases and pay the minimum payment at the end of the month it goes toward paying off the lower interest rate first...

 

[gav]

Maybe he poured money into superannuation while using the credit card to finance a renovation project which he eventually sold for a profit without paying a cent of capital gains tax but in the meantime during the sales process and settlement he wanted to refinance the debt at the lowest rate possible...judge not lest ye...:.

judge not? just read Razza's post below... :

Hahaha trust me, that's the million dollar question all his mates ask him. No, there's no gambling, drug or sex addiction, just a complete lack of money management that has compounded itself over the years.

Eg. of such mismanagement include receiving six (6) overdrawn/dishonour fees in a month on his CBA streamline account at $30 a hit! That's $180 in November alone for not ensuring he has enough cash in his account to cover his direct debits etc.

sorry Razza, but I dont feel sorry for your mate at all! I have 3 brothers, all have similar money management skills as your mate. very frustrating at times!

 

[theasxgorilla]

Not a bad idea. I believe the Citibank credit card allows you to transfer balances of personal loans as well.

I would not do it with Citibank. They've been known to levy one-time fees of several hundred dollars if you haven't transacted on their cards and just used them to do a balance transfer to get the low rate.

 

[theasxgorilla]

You're right. Cash advances are also not included in any interest free days which means you are charged at the standard variable interest rate as soon as you withdraw the cash.

Also if you then use the card for purchases and pay the minimum payment at the end of the month it goes toward paying off the lower interest rate first...

No, you're both wrong. I've done it several times. Not for 18 months though, so in the current market things may have changed. And I don't expect it's the same for all card providers.

The rest of what you write is correct though. Which is why it's important NOT to use the card for regular transactions. Use the old card to do that.

 

[Adam A]

No, you're both wrong. I've done it several times. Not for 18 months though, so in the current market things may have changed. And I don't expect it's the same for all card providers.

Unusual response, we are either wrong or right?
Have you ever thought of a job in politics or as a broker?(re disclaimer)

 

[theasxgorilla]

Unusual response, we are either wrong or right?
Have you ever thought of a job in politics or as a broker?(re disclaimer)

Only a Sith Lord deals in absolutes.

 

[RazzaDazzla]

I would not do it with Citibank. They've been known to levy one-time fees of several hundred dollars if you haven't transacted on their cards and just used them to do a balance transfer to get the low rate.

Hmmmmmmm... How can they justify a fee just becauses you don't make new purchases on the card?

Can anyone show me the fine print where it says they can do this?

 

[theasxgorilla]

Hmmmmmmm... How can they justify a fee just becauses you don't make new purchases on the card?

Can anyone show me the fine print where it says they can do this?

I didn't bother looking it up or fighting it. I took it as a sign that this was a bank not worth doing business with. So I closed the facility and vowed never to have anything to do with them again. And it was a pertinent lesson in what banks really want credit card customers to do.