Credit card shuffle for 4 years in anticipation of wage leap
Discussion
Im studying my first year of a 4 year apprenticeship.
Im just about breaking even with my monthly living costs but would really like to start pumping money into a help to buy ISA to make the most of Mr Camerons most generous offer.
I have about £2500 of credit card debt on 0% card. This is my third card and have always paid it off by the end of the 0% period.
If i take out another card and fill it up with the intention of saving some money in a current account that can the be used to feed £200 a month into the ISA, can you see any flaws?
Is it likely that ill struggle to find a 0% ballance transfers card in 2 years time once my wages have been low for a few years? I think my credit history is flawless.
Id expect to be on somewhere between £25000 to £35000 once i finish my apprenticeship so would comfortably be able to pay down any debt at that point.
Can anyone spot any flaws?
Thanks
Ben.
Im just about breaking even with my monthly living costs but would really like to start pumping money into a help to buy ISA to make the most of Mr Camerons most generous offer.
I have about £2500 of credit card debt on 0% card. This is my third card and have always paid it off by the end of the 0% period.
If i take out another card and fill it up with the intention of saving some money in a current account that can the be used to feed £200 a month into the ISA, can you see any flaws?
Is it likely that ill struggle to find a 0% ballance transfers card in 2 years time once my wages have been low for a few years? I think my credit history is flawless.
Id expect to be on somewhere between £25000 to £35000 once i finish my apprenticeship so would comfortably be able to pay down any debt at that point.
Can anyone spot any flaws?
Thanks
Ben.
Mattt said:
Fees? Less chance of getting a mortgage due to large unsecured borrowings?
Fees seem rather negligible compared to the interest id earn on the money in the ISA, yet alone the gov addition. As for the unsecured borrowings, id pay it all off before i applied for a mortgage. I have £5-6k of assets anyway (motorbike and car)
If the CC route doesnt work then the car will be swapped for a cheaper one to free up some money.
Benbay001 said:
I have £5-6k of assets anyway (motorbike and car)
Two things to consider, I did similar to get through Uni and contemplating similar again as our CC provider has some amazing deals on that could save me 000s of mortgage interest if well executed.1. Doing the above occupies thought and some mental capacity. I can't set and forget these things so there is an actual cost, a brain tax if you will. They end up hanging over me.
2. The quote above, those aren't assets they are liabilities. It's a horrible book but it's worth a read of Rich Dad Poor Dad and investing in your financial intelligence now: http://uk.businessinsider.com/money-lessons-rich-d... Wish I had started earlier.
Sorry to be a pain again. But what are the downsides of 0% money transfer cards? £2000 transfered to my current account interest free and 1.7% transfer fee and then feed this into an isa over a year or two?
Virgin are offering 32 months interest free period with that 1.7% rate. Thats alot longer than 0% purchases cards.
Whats the catch?
Virgin are offering 32 months interest free period with that 1.7% rate. Thats alot longer than 0% purchases cards.
Whats the catch?
Benbay001 said:
Sorry to be a pain again. But what are the downsides of 0% money transfer cards? £2000 transfered to my current account interest free and 1.7% transfer fee and then feed this into an isa over a year or two?
Virgin are offering 32 months interest free period with that 1.7% rate. Thats alot longer than 0% purchases cards.
Whats the catch?
The £34 quid transfer fee and probably a large interest rate once the 0% time is up. Virgin are offering 32 months interest free period with that 1.7% rate. Thats alot longer than 0% purchases cards.
Whats the catch?
Also, borrowing to put in an ISA seems a bit pointless, as the government will only top up if you put in upto £200/m, any more than that is capped at £50. And then you have to pay off the cc in 2 years anyway. Surely you would be better just saving it? As you're going to have to save it anyway in order to pay back the cc..
Maybe Im being daft, but borrowing to fund a monthly savings account doesnt make much sense when you then have to save to pay off the borrowing...
Condi said:
The £34 quid transfer fee and probably a large interest rate once the 0% time is up.
Also, borrowing to put in an ISA seems a bit pointless, as the government will only top up if you put in upto £200/m, any more than that is capped at £50. And then you have to pay off the cc in 2 years anyway. Surely you would be better just saving it? As you're going to have to save it anyway in order to pay back the cc..
Maybe Im being daft, but borrowing to fund a monthly savings account doesnt make much sense when you then have to save to pay off the borrowing...
I got the card, didnt realise id had repliesAlso, borrowing to put in an ISA seems a bit pointless, as the government will only top up if you put in upto £200/m, any more than that is capped at £50. And then you have to pay off the cc in 2 years anyway. Surely you would be better just saving it? As you're going to have to save it anyway in order to pay back the cc..
Maybe Im being daft, but borrowing to fund a monthly savings account doesnt make much sense when you then have to save to pay off the borrowing...
The issue is im on £13000 now. £30000 when i finish, 4 years time.
32 months a 0% money transfer. Ill be on a much better wage by then. Enough to pay the card off.
Well, it's a gamble - because no-one knows what the future will bring. It all hinges on you ending up on £30K in 2020, and rates staying as anticipated. Before you dive in, run the numbers on 'worst case' and see if the loss is a risk worth running for the possible gain. Personally I'm with Ozzie.
Simpo Two said:
Well, it's a gamble - because no-one knows what the future will bring. It all hinges on you ending up on £30K in 2020, and rates staying as anticipated. Before you dive in, run the numbers on 'worst case' and see if the loss is a risk worth running for the possible gain. Personally I'm with Ozzie.
What loss? Sorrygoogle "stoozing" this is effectively what your talking about, i've been doing it for over ten years, done right you can make money with the only real downside (excluding time to manage it all) is that it can lower your credit score as it appears as if you've got a lot of unsecured debt - even though technically you haven't.
Benbay001 said:
What loss? Sorry
1) You may not be on £30K in 20202) You could lose your job
3) The Govt could change the rules on ISAs at any budget
4) Your CC provider could discontinue the product
The returns on ISAs are generally very low; whilst they are 'tax free' you're not saving very much tax. To me it's a low-margin win that could go pear shaped, and it has four years to do so.
Nano2nd said:
google "stoozing" this is effectively what your talking about, i've been doing it for over ten years, done right you can make money with the only real downside (excluding time to manage it all) is that it can lower your credit score as it appears as if you've got a lot of unsecured debt - even though technically you haven't.
No its not, because normally you can unwind the savings to pay back the borrowings. In this case, you cant. If you take out the money from the ISA then the part the government puts in is lost, so you're whole reason for doing it is therefore pointless.
As ^^ says, there is a lot which could go wrong and there is plenty of time for it to do so, and in the meantime you've got unbacked loans which look bad on a credit score. You say you'll be on 25k in 4 years, but have to pay the card back after 2. And as soon as you start paying interest then it will be more expensive to pay the card than you're getting in the ISA. So you need to save £80/m from now just to fund the card. Meh, seems totally stupid to me, may as well put that £80 in your ISA and forget about the card.
Edited by Condi on Saturday 9th January 23:22
Shouldnt have ever asked.
Im fairly sure £2k of debt isnt going to get on top of me. If i had to pay it back next month i could figure out a way to do it.
In the worst case scenario i could balance transfer it to another card.
I would consider it is effectively stoozing (which i read up on yesterday)
Im fairly sure £2k of debt isnt going to get on top of me. If i had to pay it back next month i could figure out a way to do it.
In the worst case scenario i could balance transfer it to another card.
I would consider it is effectively stoozing (which i read up on yesterday)
Benbay001 said:
Shouldnt have ever asked.
Im fairly sure £2k of debt isnt going to get on top of me. If i had to pay it back next month i could figure out a way to do it.
In the worst case scenario i could balance transfer it to another card.
I would consider it is effectively stoozing (which i read up on yesterday)
Another idea of course is not to live in debt. You seem bright and have decent prospects. Try life in the black and enjoy it Im fairly sure £2k of debt isnt going to get on top of me. If i had to pay it back next month i could figure out a way to do it.
In the worst case scenario i could balance transfer it to another card.
I would consider it is effectively stoozing (which i read up on yesterday)
Fannying about with 0% CC deals is for the poor who have no other choice IMHO.Simpo Two said:
Another idea of course is not to live in debt. You seem bright and have decent prospects. Try life in the black and enjoy it Fannying about with 0% CC deals is for the poor who have no other choice IMHO.
what a load of b Fannying about with 0% CC deals is for the poor who have no other choice IMHO.
ks, "fannying" around with 0% credit cards is a tried and tested way of making money for the financially astute, i've averaged well over £100pm savings on my offset mortgage interest every month for about 12 years due to "fannying" around.to the OP i say go for it, even if worst case scenario is that you have to pay back the CC's with the ISA you'll loose the contribution, which your wouldn't of had anyway! nothing ventured nothing gained!
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