I loved my first credit card no money on a Saturday night..no problem 2 grand and a lot of fun later I realised that making the minimum payment was going to take about 6 years to pay off loan from nat west took 2 with a better interest rate too easy to get credit over there when I left I cancelled credit cards which would have gave me 40 grand of credit I could have bought my house here on uk credit cards mental btw can you still get the QPR credit card
I have a Tesco clubcard credit card that I pay for most things with and pay off in full every month. On the clubcard vouchers I earn I get to go away to a nice hotel at least twice a year and before they stopped doing it we used to go to Disney Paris at a Disney hotel (including passes) about six years running for free. So if used correctly they can be useful.
I'm still doing this kind of thing in a big way. At the moment I think the value of me doing it is sitting at around £25k in what I've made/saved in interest so far. (I've effectively knocked 5 years off the end of my mortgage by getting student loans I didn't need and using them to increase my deposit because it was cheaper than mortgage rates would have been. The credit card thing is shockingly easy to do though, so long as you keep your nose clean with payments and don't have your cards maxed out they just give you frightening sums. At the peak of me doing it I was 24/25 and had a mortgage that was over 4 times my salary, and then had another 2 times my salary available on credit cards and was still offered half my salary again when I applied for another card. I also at the time had 8 or 9 credit cards and a student bank account with an interest free overdraft. About 25% of my disposable income was coming from interest payments on it. Even now when credit is meant to be tighter I've got 3 times salary on the mortgage and another salary on cards (half used) and they still give me 1/3 of my salary again when ever I ask for a new card. As much as I'm benefitting, it's easy to see how people lose control of it and end up in the ****, it really should be more restricted. As people have said, it's doable with discipline and the right deals. As you're needing to ask about it I don't think it's for you. I don't mean that in a patronising way, I mean I don't think you'll find the benefit you get from it justifies the effort involved for you. I've said above about making a lot of money doing it, but it took me several years to get into the position where the figures involved were big enough to do that, I entered into it knowing it was a long term plan, and I'm including benefits I haven't yet received but that I know I will receive. (eg the student loans in place of extra mortgage have saved me some interest already, but I've already worked out what they'll save me by the end of my mortgage as well). With a 10k card (I think Barclaycard limit you to 90% as cash/balance transfers) you'd get £9k and it would cost you £171 for the fee. In that time you'd save £90 on your fees so you'd need to make £81. in interest which is just short of 1%. Because it's only for 6 months you'd need it to be paying out 2% after tax a year. If you're a standard rate tax payer that means a 2.5% interest rate on the account, or if you're a higher rate payer 3.3%. As your Santander account is paying you 3% if you're on the 40% tax rate you will lose money doing this. If you're on the 20% rate then you'd make £36. If you're not completely sure about I wouldn't bother, it's not a big enough gain to compensate for the work involved. Plus that £36 is the ideal amount. You won't get the full benefit because it'll take a week or two for the money to get into your Santander account, you'll be making minimum payments of either £75/month or £150/mth on that balance (I have either £25 or £50 on a balance of about £3k with them) which reduces the amount you still have in the bank earning interest, and you'll lose some time at the end of it by making a full payment to clear the balance in advance of the interesst free period ending. You're probably looking at the end result being about £30 profit. £5/mth for something you were unsure enough about that you felt you should ask us first probably isn't worth it. The peace of mind of knowing you're not going to mess it up a the end is probably worth more to you.
Depending on the type of mortgage you have and specific terms you could bung the cash into that and save the interest you'd pay on 10000 over the term then withdraw it and pay the card off. The benefit in doing so would come down to your specific mortgage and circumstances but could represent a reasonable amount. Plus if it's 'hidden' in the mortgage no temptation to spend.
Oh yeah, if you do that then you don't need to worry about your tax band either because you're reducing the interest you're meant to pay them rather than being paid it. So if you had a 3% savings/current account as one option, and a 3% offset mortgage as the other you'd put it against the mortgage. Your best bet is to look on moneysavingexpert.com at the guides about stoozing (that's the credit card version) and deficit banking (the same as stoozing, but using things like student loans and overdrafts instead of credit cards)
It's a poncey financial term for the final payment on an lease purchase contract that settles the remaining balance and allows title of the underlying item to be transferred from the lessor to the lessee.
It's so poncey they don't even bother teaching it to accounting students when they're covering leases (first time I've heard the term was this thread). It sounds just like the kind of term some 80s yuppy with big hair would make up so that they sounded flasher whilst they were on the train shouting their business into a phone that made their hair look ordinary sized. It then sreads through the company and people think it's actually the professional term. (it might well be the professional term even if it's not used academically, just saying it sounds like the yuppy talk)
No problem, it's stuff I've been looking at for 15 years, and practising for nearly 12 (I had to wait until I left school to be able to start). The amusing part was when my mum laughed at me for how much time I spent on clever tricks like that one year saying it couldn't be worth it. Obviously at the start you don't make much by the time you allow for the time going through the application process, setting up the transfers/direct debits, and making sure you pay it off in full, you're virtually on minimum wage then (you'd be different because of the size of credit limit you have, when I started at 19 and as a student you were lucky if you got £500 limit). She stopped laughing when I asked her when she started getting paid more than the £300/hr it worked out at for me that year. (If only there'd been more hours' worth of work to do on it)
Playing around with cash and investments is a very personal thing. My old man never had a personal pension, because he knew he could do better investing and moving cash around himself, and he was right. He loved playing the markets, investment funds etc, spent a couple of hours every day on it. He was also a very good poker player and crucially knew when to stop. When he hit 70 he stopped playing, saying his brain wasn't fast enough any more and that everything was in place. He'd stopped high stakes poker at 60, and switched to bridge. My wife is also ace at spotting deals, switching cards and mortgages, setting up ISAs and funds for the kids - I only discovered a few weeks ago that she had salted away all of my son's family allowance for 18 years in a tax free account in his name - rent and living expenses for first year at Uni dealt with. In contrast, while I know I could do this if I put my mind to it, I rarely bother, the only thing I pay attention to is my pension and the tax return. My response to wanting more cash is trying to earn it. So I'm eternally grateful that I have someone who actually enjoys it in my house. I think it takes real dedication and discipline, as Riccardo has shown.
I haven't got time to explain it now (I'll do it tomorrow or Monday when I'm next on), but even if it's not the intention now, if he can be disciplined he should still apply for and take the maximum student loan he can get. DO NOT consider a student loan as debt.
Don't worry mate, thats definitely on the agenda, student loans are about the cheapest capital you will ever get your hands on. And I'm sick of paying for everything anyway.
