Interest free car loan?

[mike_nofx]

Having just received another email from a credit card company offering 0% interest for 9 months on balance transfers, it reminded me of something I heard a while back where a guy purchased a car (or at least part of the payment) on a credit card, then transfered the balance to another credit card company offering 0% on balance transfers.

I really cant remember where I heard that story so cant confirm how authentic it is.

But basically, Is this possible?
For example, could I buy a car for $10k on credit, then transfer the balance the next day to a 0% for 9months credit card.
The only issues I see are if the car yard doesnt accept a credit card, OR if he does accept credit card he may charge a 2.5% surcharge. Which is only $250 anyway.

Any thoughts on this?

[mike_nofx]

Incase anyone is interested, heres the fine print on the offer I received.

The things you need to know - Fees, charges and credit criteria apply. Terms and conditions apply and are available upon request. You must be at least 18 years of age and earn at least $35,000 p.a. to apply for this credit card.

1. The 0% p.a. interest rate applies to balances transferred with this offer at point of application, for a period of 9 months. At the end of the balance transfer period, the interest rate on any outstanding transferred balance will revert to the annual percentage rate for cash advances; currently 20.99% p.a. for the Virgin Australia Velocity Flyer Card. Your total balance transfers may not exceed 80% of your credit limit. Interest rates are variable and subject to change. The interest rates are current as at 9 January 2013. This offer is valid from 9 January 2013 and ends 31 March 2013.

2. The offer is valid for two Guests only and both Guests must be booked and travelling together, and the Primary Cardholder must be one of the guests travelling. Offer provides 50% off Domestic Virgin Australia flights for you and a friend for up to 4 segments a year in saver, flexi and premium fare classes (excludes sale fares). The Virgin Australia Guest Contact Centre will advise if there is availability for the dates you wish to travel. Credit card payment fees apply to both Guests and are not discounted. Checked baggage charges apply to some fare types. New Virgin Australia Guest Contact Centre bookings made at least 21 days in advance only. Payment with Virgin Australia Velocity Flyer Card and/or Virgin Australia vouchers required. Seats must be booked in the same fare class and are subject to availability which may be limited at peak times such as weekends, Christmas or School Holidays. Check out here for further Terms & Conditions.

3. To earn and redeem Velocity Points, you must be a Velocity member. Velocity membership and Points earn and redemption are subject to the member Terms and Conditions, available at virginaustralia.com/velocity, as amended from time to time. Points are earned on eligible purchases only.

[Yellow_Festiva]

I tried to by my Focus using my credit card. Dealer only allowed me to put down the 3K deposit at the most.

Perhaps if I was a little more pushy I could have paid a little more / all of it on the card. Didn't really bother me. Was happy with the 3 grand worth of points.

Several years ago I did buy a used car off a car lot for $5700 (or was it $4.7K.. can't remember now!) for my mate. We were there Sat arvo and finalised the sale.

Made a joke about how I didn't carry that sort of cash around and that any big purchases these days are on my Credit card.. ie, I would need to return next week with a cheque. He said no worries, we can do the lot on the card, so we did. ;)

[xisled]

If you can get a credit card with 10 grand in the first place and then get a second credit card that has interest free and limit of 10 grand it is possible. The other thing you can do, is get the first credit card withdraw the 10 grand in cash, pay for the car in cash and then do a balance transfer.

[stevz]

Originally Posted by xisled

If you can get a credit card with 10 grand in the first place and then get a second credit card that has interest free and limit of 10 grand it is possible. The other thing you can do, is get the first credit card withdraw the 10 grand in cash, pay for the car in cash and then do a balance transfer.

I'm pretty sure you will find that balance transfers can only be done on purchases, not cash advances.

[last fairlane]

I tried that I bought a Mustang and a Territory
both on my card which had a $25k limit using cash advances
when I went to change to a 1.9 rate I was told it was only for purchaces
that were on the card not cash advances so Stev was right on that count
five years back I bought a BA Ghia on the card from Pickles and they charged me a percentage for using the card from memory it was $150 in fees
maybe having two cards might be the way to go
also when you get a letter saying transfer your ballance to our credit card
do you get to keep and still have the original card with a zero ballance
and start again or is your old card cancelled
just wondering
John

[Kieron]

U bought a car on CC for around 23K once, card had around 5K limit so I just stuck the 23K cash in to buy the car and no problem. Scored enough frequent flyer points on the card for a round trip to Bali.

I transferred the balance of my CC to a HSBC 0% $0 fees/9 months account last year, they simply asked how much the balance was and thats what they put in, nothing abouut cash advances were asked. Weather they close the original card or not I guess owuld depend on your ability to repay, in my case they didn't ask me to cancel the original card and to this day I still have both.

[xisled]

Originally Posted by stevz

I'm pretty sure you will find that balance transfers can only be done on purchases, not cash advances.

I have done 3 balance transfers in the past 6 months. None worried about cash advances. All up around $30000.

The Credit card with the balance transfer, ask how much you want to be transferred to the other card. You tell them, they make the payment. Not 1 company has asked me about the cash advance. All they needed was the amount I wish to transfer.

The 2 credit card companies are not allowed to talk about your finances due to privacy, so how would the company know that is doing the balance transfer, that the credit card has cash advances.

[bobthebilda]

Credit card companies (or the banks that offer the deals), dont give a ****** what the money was used for etc, when you do a balance transfer. As long as you pass their criteria, they will offer you the deal. The whole purpose is to sucker you over with the interest free deal, with the intention that it will take you many years to pay it off, and they will be getting you for the majority of the loan at 18% plus (which is not a bad deal considering they borrow it off their customers at 4-5%). Thus unless you are able to pay it off in the interest period, its probably better to look at a car loan for around 12% interest.

The second issue that the merchant of the product always losses money to the credit card provider. A car yard is going to be charged a few percentages by the card provider on the sale of the product. Either the car yard wears the cost, or they add it onto the price of the product. Most car yards will allow a small percentage of the car price to be paid by cc, it would be very rare to see one offer the full price on an advertised price.

[Ben73]

If you transfer your balance to one of these 0% cards, do you have to pay of the balance within 9 month to get the 0% interest?

I know if I could pay off a car loan in 9 months I wouldn't worry about a loan, unless it was an emergency. Id rather just save the money up.

[xisled]

Originally Posted by Ben73

If you transfer your balance to one of these 0% cards, do you have to pay of the balance within 9 month to get the 0% interest?

I know if I could pay off a car loan in 9 months I wouldn't worry about a loan, unless it was an emergency. Id rather just save the money up.

Most will revert to the standard interest rate after the interest free period. What ever is left over will be charged at the normal rate. Each card would have its own conditions.

[last fairlane]

Just to clarify the 1.9 percent on transfers
Im with Westpac and I wanted to transfer the ballance to the 1.9 card but because the second card would also be Westpac they wouldnt do it as most of the card was cash advances
just my experience with them