Will this plan work?

[gmartin010]

Hi Guys

I have an Everyday Woolworths Qantas FF Card and was considering the following plan. I also have a $4k car loan at present.


Is it feasible to pay off this car loan on my credit card (will I get FF points?) and then do a balance transfer to a 0% for 9 months credit card with no fee for the first year? Obviously this will have the double positive of getting FF points on the Woolworths card and then paying no interest on the remaining $4k car loan.


My first thought is that there is surely some roadblock as it seems too easy. Any thoughts or experiences are much appreciated.

 

[The Rok]

It depends on how the payment from the CC to the loan is treated. If its treated as a cash advance then the fees might knock out the interest savings and the transaction wouldn't earn any points.

 

[burmans]

Hi Guys

I have an Everyday Woolworths Qantas FF Card and was considering the following plan. I also have a $4k car loan at present.


Is it feasible to pay off this car loan on my credit card (will I get FF points?) and then do a balance transfer to a 0% for 9 months credit card with no fee for the first year? Obviously this will have the double positive of getting FF points on the Woolworths card and then paying no interest on the remaining $4k car loan.


My first thought is that there is surely some roadblock as it seems too easy. Any thoughts or experiences are much appreciated.

I don't think you get points on Balanace Transfer but the interest saving may well be worth it. One caveat, don't us ethe card for anything else and don't forget to pay it out (or find someone else to Balanace transfer) at 9 months.

 

[drewbles]

Who is the car loan with? I've never found any institution that allows payment of loans with a credit card (short of a cash advance, which will instantly accrue interest, and zero points).

 

[Simo]

Years ago I had the same idea for the last payment on a car loan and it was a cash advance and cost me money and got no points.

It was a few thousand dollars so I should have just payed the cash and not tried to chase the points.

Lucky I paid the CC off a few days later.

 

[gmartin010]

Thanks guys

I knew it sounded too good to be true. I have confirmed what you have all said above. It is considered a cash advance so it is certainly not worth doing.

Cheers

 

[eastwest101]

Yes - I would have thought so too. Aside from the problem that with most car loans - if you try to pay the car loan out early, you just get smashed with loan fees anyway thus negating any interest savings or any FF point benefit as you pointed out that its treated as a cash advance.

 

[casanovawa]

It certainly works if instead of trying to pay off the loan, you go and buy the car on the credit card in the first place, I have done that before and picked up about 12-13,000 QFF points and then after a month balance transferred it to a 6 month interest free card, then to a 9 month interest free card... Had it all paid off in 2 years and saved who knows how much interest into the bargain...

 

[gmartin010]

It certainly works if instead of trying to pay off the loan, you go and buy the car on the credit card in the first place, I have done that before and picked up about 12-13,000 QFF points and then after a month balance transferred it to a 6 month interest free card, then to a 9 month interest free card... Had it all paid off in 2 years and saved who knows how much interest into the bargain...

Have absolutley no problem doing this with my next vehicle. Maybe not putting all of it on credit card but a decent chunk.

One thing that I have found some people doing in relation to my conundrum above is actually applying for the balance transfer upfront. So lets say you apply for a $5k balance transfer from your current credit card to a new credit card with 0% for 9 months (and zero annual fee). Assuming your original credit card has a zero balance, once the transfer goes through, your original credit card is sitting in $5k credit. You then pay off your $5k car loan using that credit. Apparently this avoids the cash advance fees but I am certainly not game to try this.

Also as eastwest101 mentioned, the car loan company may hit you for early pay off fees.

 

[ashleyn]

Pretty sure it's illegal, in Australia, to pay credit with credit.

 

[eastwest101]

Good to know casanovawa - did you get a lot of "push back" from the car dealer in the negotiation phase about you paying with a credit card? Partly credit card and part cash/bank cheque? New or used car? Just curious.

And gmartin10 - thanks for the tip about having credit card balances in credit, has got me thinking as well now.

 

[get me outta here]

There was a good thread about a year ago on the topic of buying cars on cc. Maybe have a search, unless someone else knows where it is.

 

[DeKa]

There was a good thread about a year ago on the topic of buying cars on cc. Maybe have a search, unless someone else knows where it is.

Do car dealers take eftpos (savings)?

 

[ashleyn]

Do car dealers take eftpos (savings)?

Many allow you to pay the deposit on CC or EFTPOS.

 

[elbarto]

I paid for my partners car on my credit card. The card fee was about $40 on mastercard, but would have been closer to $300 on amex which would have earned more points. The mastercard fee was worth it even though it only netted half the amount of points.

 

[11sjw]

I paid for my partners car on my credit card. The card fee was about $40 on mastercard, but would have been closer to $300 on amex which would have earned more points. The mastercard fee was worth it even though it only netted half the amount of points.

Ran a $20k car through my AMEX 6 or 7 years ago. Managed to get the dealer to include the CC fee (ie $0 charged) as well.

 

[casanovawa]

Good to know casanovawa - did you get a lot of "push back" from the car dealer in the negotiation phase about you paying with a credit card? Partly credit card and part cash/bank cheque? New or used car? Just curious.

And gmartin10 - thanks for the tip about having credit card balances in credit, has got me thinking as well now.

Nope, no real push back, charged me 1% for using a visa/MC which for $20,000 price tag equated to about $200 or so for using credit card... Used car (Commodore SV6) Who knows if i had pushed harder or threatened to walk out the yard he might have caved, or maybe i got a better deal in the bargaining phase where if it had been worse and they had made lots of money on the change over they wouldn't mind waiving the fee to close the deal??? Not sure if most car salespeople would have let the deal fall over for $200???

What i had back then was an EDR MC and an ANZ Visa so because of the limits i put $5000 on the EDR at 1 pt/$1 and $15,000 or so on the ANZ visa which got like 0.5pt/$1 so that's why i ended up with about 13,000 QFF points... I had the cash in the bank for the whole thing, but wanted to do it this way to earn the QFF points and keep the cash in a 6% high interest account while paying near enough to 0% interest... Even after accounting for losing some of the interest at tax time i think it still worked out like the bank was paying me to use their credit and i kept my money in my account ready for any contingency...

When i came to switch a month later via a 6 month interest free balance transfer because of the limits i already had they only gave me a $12,500 limit on the new card so i paid off $8,000 pretty quick, but then just paid the rest of leisurely over 2 years at almost 0% interest, maybe one of the later cards had like 1.9% or something, beat any bank loan at the time...

So if wanting to do this you would maybe want to get your ducks lined up as to how much the car costs, what current credit limits you have to buy it, then taking into account existing credit limits what credit limit they will give you on the new card to balance transfer it, plus what cards will net you the highest pts/$... I had only found this site about a month or so before i did it i think.... Maybe even after i did so hadn't learnt to optmise points earn....

 

[drewbles]

Good to know casanovawa - did you get a lot of "push back" from the car dealer in the negotiation phase about you paying with a credit card? Partly credit card and part cash/bank cheque? New or used car? Just curious.

And gmartin10 - thanks for the tip about having credit card balances in credit, has got me thinking as well now.

I paid a $12k deposit for my car on my Amex. No surcharge. I asked during negotiations and was told 'sure that'll be no problem'. This was a BMW dealership.

Netted me a nice haul of QFF points

 

[DeKa]

Many allow you to pay the deposit on CC or EFTPOS.

If that's the case, the easiest way around this is to buy a whole heap of XS cards. They will be charged 15c per card you put through.
eftpos Merchant FAQ
If you buy a $20k car, that's 21 XS cards (although you'd only spend $100 on the 21st one). If the dealer wanted to fight over $3.15 work of fees, you could give it to them in 5c coins

I don't know if this would work for the OP, but it should work for any other car buyer at a dealer.

 

[eastwest101]

So if wanting to do this you would maybe want to get your ducks lined up as to how much the car costs, what current credit limits you have to buy it, then taking into account existing credit limits what credit limit they will give you on the new card to balance transfer it, plus what cards will net you the highest pts/$... I had only found this site about a month or so before i did it i think.... Maybe even after i did so hadn't learnt to optmise points earn....

Thanks for the information casanova I am still looking for similar threads about this from last year. As you say - you need to have all your ducks in a row re current and future credit limits and minimizing fees, the income and funds to do it plus the whole capped and uncapped points thing to consider. I like your thinking and will keep it in mind for when I need to get a new car.