bramptonbrian

I'm not too bright on money matters so can you bankers out there tell me why this won't work?
If you have 2 credit cards with different banks and transfer the balance each month from one to the other within the interest free period, in theory, an interest free loan for a indefinate period could be acheived

Wendy

Most CC card companies charge you 2% for balance transfers, they must have got wise to it

Wife Beater

Do you mean you are going to use one credit card to pay the other cards bill and then do the reverse the following month so on so on?

I don't think you can pay a CC bill with a CC.

Wendy

You can, just keep transferring money across from one to the other, they class it as a payment.

But they are all now charging 2% for it, so really you are paying interest

Wife Beater

But you can't PAY a credit card bill with another credit card AFAIK. If you could then we would all be doing it.

Wendy

I have done it

Before they started charging you for it though, I'm not THAT daft

Wife Beater

I have 4 credit cards and not one of them has a payment option of another credit card. They offer the usual cash, bank deposit, DD, internet payment etc etc but no CC option.
Lucky really or I would be tens of thousands in debt which would circle from one card to the next. LOL.

Wendy

Ah, you see that's where I'm confusing you. If you transfer the payment amount from one to the other then they see a credit and it is classed as paid.

So if you have an egg card and a marbles card, you can in effect transfer money from egg to marbles and marbles take it as a payment.

bramptonbrian

I can't see any small print regarding the 2%, but I've done it on a promotion so it may not be applicable?
Had another thought though, doing the transfer will also give double reward points
2% seems not a bad option of managing a short term financial crisis don't you recon

Wendy

You have to be careful though, if you get used to having that extra money it's very easy to get carried away with it and end up owing thousands.

But for a few months then yes, it's a viable option.

tiredwithtwins

not a visa thing, but recently heard of a rather crafty (perhaps immoral/unethical) way of getting interest free credit - when you tell the working family tax credit people what your income is, tell them a basic minimum - ie £17,000 (the eg i was given) - you then get a weekly payment of about £92....over the year thats...um...£4,700+....... then when you declare your income at the end of the year and you have to pay it back - voila, an interest free loan that can be paid back at whatever rate you can (again, the eg i was given was about £30/month).

doubt you could do it year after year....but if you work in a job that has a basic salary (eg car salesman) and is made up with commission/prp or whatever you arent exactly lying about your basic as you cant begin to accurately estimate your income in that kind of job.

bramptonbrian

Careful maywell become my middle name
I feel a career as a financial adviser calling

phoenixinoz

Seems there is some confusion re this.

What the OP is talking about is called [in banking terms] a "Balance transfer".

This is how it works in general terms.

1) Card holder rings their card company and asks for a payout figure
2) The card company gives them a figure which includes full payment of the card, including any fees, interest, charges, balance and Authorised outs.
3) Card holder goes to rival card company and negotiates a transfer of balance, usually at a lower rate than the current card.

This is where the trap is
1) The balance transfer is usually at a lower rate but the ongoing rate once transferred, can in fact be higher than the original card.
2) The card company you've left, will have records of you leaving on file for 6 years.
3) The new card company will have a record of your transfer on file until you close the card, and for 6 years thereafter.

All banks keep historical files on every bit of credit you have ever had. And these systems all operate from one credit agency, regardless as to what they tell you

To the original poster...this idea although great in theory, in practice it would not happen. You would not get away with it. You may for a short period of time [providing you used different banks initially] however EVERY time you apply for credit, this is listed at the credit agency that all banks use. Eventually you would be *blacklisted* on the credit file due to having asked for credit X amount of times. This is why when some ask for a mortgage, loan or credit card they are refused. The banks are not obliged to say why however sometimes it is simply because they have requested a credit check on X occasions in X amount of time [a timescale set & determined by the credit agencies].

So...in a nutshell, obtaining a credit card from many banks and swapping and changing etc is not going to happen long term. And credit transfers do cost. Regardless of what the "deal" is.

Where banks are concerned.....there's no such thing as a free lunch

phoenixinoz

You are right. You cannot pay off one credit card using credit. Although technically you could take out cash and pay your other card off that way. I wouldn't recommend it though as cash from a credit card is extortionately expensive

However, what you can do is pay off another credit card by balance transfer i.e closing one card down and transferring the balance to a new institution /new card. Again.....not a cheap option however it can be done. Often people do do it and in essence this is paying credit with credit.

madsad

Is this whole idea not called credit card surfing
every 6mths or so you change from one card to another which offers 0% interest for the first 6mths?

great idea IF you are accepted!!

Donna.