Credit Card - 0% on purchase then move to 0% balance transfer?

SamirNovus

Hi,

So I have some larger expenses coming up and I'm looking at getting a credit card to possibly cover some of these and pay them off over a period of time. I'm trying to figure out the best way to go about this by keeping interest to a minimum. I dont think i'll have an issue getting accecpted for a credit card given my previous good credit and I do not currently have one.

So my question or suggestion is
1. Initially get a CC with 0% on purchases for first 6 months (example Bank of Ireland Classic)
2. Once the 6 months is up, get another CC which offers 0% Balance Transfer, move the balanance and cancel the original credit card(example An Post Money)
3. Pay off the balance off the new CC within the year to ensure 0 or minimal repayments

Does this make sense? Is there anything obvious that i'm missing? Is it common practice?

I'd like to have a CC anyway and just thought if I could use the offers to my advantage why not

Cheers,
Sammy

Salary Negotiator

No, I've done it for larger purchases. You'll have to pay the stamp duty on each card though and the temptation could be there to start using the card which can mess up your plan.

If you intend on using the card for smaller regular purchases just check how any payment is allocated, as it may go against the transferred balance rather than the spending and you'll end up paying interest.

Any time I've done it I just cut up the card, pay down the balance and then close the account.

SamirNovus

Thanks for the quick response.

So just so i'm clear are you saying is a feasible option? I'm not concerned about over using it and I will be simply doing the above steps and paying off the balance and closing the account

coylemj

Salary Negotiator wrote: »

You'll have to pay the stamp duty on each card though ......

You only have to pay the Govt. stamp duty once in each year which ends on April 1st....

If you switch accounts you should pay the stamp duty to the old bank or card issuer on closing the account. Your old bank or card issuer will request the Stamp Duty in your final statement and will then issue you with a Letter of Closure. This letter will confirm that you have paid the Stamp Duty for the period in question. You should present this letter to your new bank or card issuer, who will not bill you for Stamp Duty for that period.

If you change credit card or charge cards a number of times in the same accounting period, you will only be charged on the original account. This is provided you obtain a Letter of Closure each time you close the account. The second or subsequent bank or card issuer will issue a Letter of Closure once it has proof that the duty was paid on the first account.

https://www.revenue.ie/en/property/stamp-duty/other-stamp-duty/financial-cards/credit-cards-charge-cards.aspx

coylemj

SamirNovus wrote: »

2. Once the 6 months is up, get another CC which offers 0% Balance Transfer, move the balanance and cancel the original credit card(example An Post Money)
3. Pay off the balance off the new CC within the year to ensure 0 or minimal repayments

Does this make sense? Is there anything obvious that i'm missing? Is it common practice?

It sounds like a good idea but I'm think there could be a roadblock, like the balance transfer to a new card with an interest-free holiday may require that you held the old card for a minimum period. And something tells me that this will be longer than 6 months.

SamirNovus

Thanks guys.

@coulemj, thats a good point which I hadn't considered, I was thinking they are offering these to get you onto their card so might not have those kind of conditions

I'll have a think and do the math and see if it makes sense if this is a condition

Thanks all

is_that_so

I'd just pick one card, the one with the best deal. If you work out the approximate cost per month rather than using the headline rate it helps your mindset about it. Balance that with what hoops you're likely to have to jump through for a bank loan and the inflexible repayments.

Thoie

As you're never planning on being charged interest, the APR probably doesn't interest you too much, but bonkers has a handy comparison showing credit cards with 0% new, 0% for transfers, and the standard APR:

https://www.bonkers.ie/compare-credit-cards/your-results/

Might as well get one with the lowest APR you can, in case anything happens that you end up paying some interest.