Virgin High Flyer upgrade and free cash(temporarily)

[Willsmere]

Hi, while booking some 2 for 1 flights thru my virgin flyer card the other day as I was about to hang up the operator said as I have been a loyal customer they would like to offer me an upgrade to the high flyer card for the same annual fee as the flyer($129 instead of $289), ok, why not, earn more points some other potential benefits as well. Then because I wasn't transferring a balance from another card instead they said we can cut you a cheque for upto 80% of my limit for me to do what I want with 6 months interest free. There doesn't seem to be any catches or fees, besides paying it back in time. I think they offered me $15,000. I figure, take it, put it on my mortgage for 5 and a half months and give it back. Seems too easy? Anyone done this before??

 

[Eggsbenedict]

Hi, while booking some 2 for 1 flights thru my virgin flyer card the other day as I was about to hang up the operator said as I have been a loyal customer they would like to offer me an upgrade to the high flyer card for the same annual fee as the flyer($129 instead of $289), ok, why not, earn more points some other potential benefits as well. Then because I wasn't transferring a balance from another card instead they said we can cut you a cheque for upto 80% of my limit for me to do what I want with 6 months interest free. There doesn't seem to be any catches or fees, besides paying it back in time. I think they offered me $15,000. I figure, take it, put it on my mortgage for 5 and a half months and give it back. Seems too easy? Anyone done this before??

I don't think you can balance transfer from a mortgage to a Credit Card, You would need to do a Cash Transfer or Cash withdrawal from a different existing card then do the balance transfer to the high flyer (Pretty sure the Cash Advance fees would negate any benefit however if you have another high points earning card PM me as there is something you could do that might be worth your while, particularly if the other card can be transfered to Virgin during the current 15% promotion) apart from that no i don't think it is too good be to true. I pay no annual fee on some of my credit cards, have reduced interest on others (12 - 15% on high end rewards cards) and have always been able to get 6-18 months interest free balance transfers. Credit card companies would much rather keep your business than lose it and what they have offered you is no better and on some promotions worse than what they offer new clients.
If you can use it, take it and enjoy!

 

[yohy?!]

How would repayments work in respect of new purchases whilst the cash amount is repaid?

in the past I have seen other cards where the lowest interest earning balance is paid first meaning purchases sat accruing high interest until the balance transfer was repaid

 

[Willsmere]

I don't think you can balance transfer from a mortgage to a Credit Card, You would need to do a Cash Transfer or Cash withdrawal from a different existing card then do the balance transfer to the high flyer (Pretty sure the Cash Advance fees would negate any benefit however if you have another high points earning card PM me as there is something you could do that might be worth your while, particularly if the other card can be transfered to Virgin during the current 15% promotion) apart from that no i don't think it is too good be to true. I pay no annual fee on some of my credit cards, have reduced interest on others (12 - 15% on high end rewards cards) and have always been able to get 6-18 months interest free balance transfers. Credit card companies would much rather keep your business than lose it and what they have offered you is no better and on some promotions worse than what they offer new clients.
If you can use it, take it and enjoy!

Hi Eggsbenedict. I might PM you re your other idea. But I'm not sure what you were saying re transfer from Mortgage to credit card? My plan was to deposit the cheque in my bank account, transfer it as an additional payment to my home loan for 5-6 months then transfer it back to my bank account, then Bpay the cash back onto the credit card before the time limit. I can't see any issues with that?

 

[Eggsbenedict]

Sorry Willsmere, My mistake. I have never heard of a credit card company/bank offering a cash Cheque I assumed you where using the term as a figure of speech. If thats the case, even better!

Hi Eggsbenedict. I might PM you re your other idea. But I'm not sure what you were saying re transfer from Mortgage to credit card? My plan was to deposit the cheque in my bank account, transfer it as an additional payment to my home loan for 5-6 months then transfer it back to my bank account, then Bpay the cash back onto the credit card before the time limit. I can't see any issues with that?

 

[Eggsbenedict]

How would repayments work in respect of new purchases whilst the cash amount is repaid?

in the past I have seen other cards where the lowest interest earning balance is paid first meaning purchases sat accruing high interest until the balance transfer was repaid

I am be wrong again here however i was under the impression that recent Federal legislation required that the balance attracting the highest interest rate be reduced when payments where made.

 

[vitagen]

Only for new credit contracts established after that date. Its not retrospective.

 

[Eggsbenedict]

Only for new credit contracts established after that date. Its not retrospective.

At least I was partly right. In the above situation I assume an offer of a new card upgrade to the High Flyer would constitute a new contract and would therefore my answer stands in this situation?

 

[dpeter]

It's because it's issued by Citi. Citi let you do up to 80% balance as a cheque with 0% interest as a special offer. The only real problem with it is, that's paid off first. So if you use the card as your every day card, you'll pay interest on all your purchases until you've paid back the amount you got as a cheque.

 

[Willsmere]

It's because it's issued by Citi. Citi let you do up to 80% balance as a cheque with 0% interest as a special offer. The only real problem with it is, that's paid off first. So if you use the card as your every day card, you'll pay interest on all your purchases until you've paid back the amount you got as a cheque.

Thanks for that. I asked for a call back tomorrow. I'll certainly ask them that question. Although I'm not sure I would trust the call centre person even if they said I wouldn't be charged. Thanks for the heads up.

 

[knasty]

It's because it's issued by Citi. Citi let you do up to 80% balance as a cheque with 0% interest as a special offer. The only real problem with it is, that's paid off first. So if you use the card as your every day card, you'll pay interest on all your purchases until you've paid back the amount you got as a cheque.

THis is not the case. Payments are allocated to the highest interest rate debt outstanding. The catch is once you have a balance transfer you have no interest free days. So what I do is get the 80% cheque, deposit it on the mortgage, then for all purchases going forward make sure you make a payment equal to the spend a day or so after the spend is made and it is credited against the new spend, not the balance transfer. This means you can use the card, get the points, and pay an immaterial amount of interest (being calculated at ~21%/365 x days from purchase to day of crediting payment). Just don't credit payments before you've spent, or they'll be allocated to the balance transfer and not purchases.

 

[Willsmere]

THis is not the case. Payments are allocated to the highest interest rate debt outstanding. The catch is once you have a balance transfer you have no interest free days. So what I do is get the 80% cheque, deposit it on the mortgage, then for all purchases going forward make sure you make a payment equal to the spend a day or so after the spend is made and it is credited against the new spend, not the balance transfer. This means you can use the card, get the points, and pay an immaterial amount of interest (being calculated at ~21%/365 x days from purchase to day of crediting payment). Just don't credit payments before you've spent, or they'll be allocated to the balance transfer and not purchases.

Thanks knasty. I will have to suss them out on this one. If thats correct the "cash advance", or cheque, would be the highest interest rate debt outstanding therefore this would be paid down over the 6 months first in lieu of any purchases, might end up negating any benefit if im paying interest on all my purchases for 6 months. Cheers.

 

[knasty]

The cheque is not a cash advance, it is a balance transfer at whatever the promo rate is. For me 0% hence any payment us applied to purchases first.

 

[Willsmere]

Just an update for those interested. I have spoken to Virgin and can confirm what a few people were saying. The offer of "cheque to self" is in lieu of not getting an interest free balance transfer as I am upgrading the card not transferring a balance. Once you take the cheque to yourself it is not deemed a cash advance officially until the 6 months interest free period is up. However, in terms of making payments onto your card it is considered the highest debt on the card so any payments for purchases are applied to that first, so you run the risk of paying 6 months of interest on all your purchases then. But, then the call centre person said they can approve an option for you to select what gets paid off first i.e. purchases before the cash advance, therefore making this a viable option again. It is all sounding a bit convoluted and I wonder if its worth it, and whether your wishes would be carried out correctly. I can just imagine the aggravation trying to get he call centres to reverse the whole thing if you found after the first month you were getting hit for interest. I'll ponder it a little longer, unless anyone has first hand experience and it all worked seamlessly. Cheers.

 

[BillytheFIsh]

I've looked at it before and it's all too hard. If you do a balance transfer, put the card in the safe until it's paid off. Use another card for spending.

 

[knasty]

Just an update for those interested. I have spoken to Virgin and can confirm what a few people were saying. The offer of "cheque to self" is in lieu of not getting an interest free balance transfer as I am upgrading the card not transferring a balance. Once you take the cheque to yourself it is not deemed a cash advance officially until the 6 months interest free period is up. However, in terms of making payments onto your card it is considered the highest debt on the card so any payments for purchases are applied to that first, so you run the risk of paying 6 months of interest on all your purchases then. But, then the call centre person said they can approve an option for you to select what gets paid off first i.e. purchases before the cash advance, therefore making this a viable option again. It is all sounding a bit convoluted and I wonder if its worth it, and whether your wishes would be carried out correctly. I can just imagine the aggravation trying to get he call centres to reverse the whole thing if you found after the first month you were getting hit for interest. I'll ponder it a little longer, unless anyone has first hand experience and it all worked seamlessly. Cheers.

Willsmere the operator is a bit of a muppet.

Per Clause 12(b) of the terms and conditions:

(b) For credit card Account holders whose loan contract commenced on or
after 1 July 2012 we will allocate payments to the portion of the closing
balance of your most recent statement of account which attracts the
highest rate of interest first and then to the portion of the closing balance
of your most recent statement of account which attracts the next highest
interest rate and so on. If there is a zero closing balance on your most
recent statement of account we will credit payments to balances that have
not yet appeared on your statement of Account in a similar fashion.

It's a legal requirement as of 1st July 2012. I have personal experience of doing this - albeit it's a Citi Signature card rather than High Flyer but the terms are exactly the same as it's all Citi operated. So for any purchases I make I a payment 1 0r 2 days after and it gets credited against the purchase, not balance transfer. Having said that I do agree with BillytheFish that, unless you don;t have a points-earning alternative, maybe it is all a bit too hard...

 

[carwashhair]

I forget where I've read this in this site, but I think JohnK may have used a citi bt/cheque drawdown a couple of times before, perhaps check with him? Citi still run the back end of virgin Flyer CC's, from memory.

 

[b_adger]

Willsmere the operator is a bit of a muppet.

Per Clause 12(b) of the terms and conditions:

(b) For credit card Account holders whose loan contract commenced on or
after 1 July 2012 we will allocate payments to the portion of the closing
balance of your most recent statement of account which attracts the
highest rate of interest first and then to the portion of the closing balance
of your most recent statement of account which attracts the next highest
interest rate and so on. If there is a zero closing balance on your most
recent statement of account we will credit payments to balances that have
not yet appeared on your statement of Account in a similar fashion.

It's a legal requirement as of 1st July 2012. I have personal experience of doing this - albeit it's a Citi Signature card rather than High Flyer but the terms are exactly the same as it's all Citi operated. So for any purchases I make I a payment 1 0r 2 days after and it gets credited against the purchase, not balance transfer. Having said that I do agree with BillytheFish that, unless you don;t have a points-earning alternative, maybe it is all a bit too hard...

The problem is the loophole where the purchases have not yet appeared on a statement, they may apply the payment to the purchases, but I don't see that they have to do so in the above conditions.

 

[knasty]

The problem is the loophole where the purchases have not yet appeared on a statement, they may apply the payment to the purchases, but I don't see that they have to do so in the above conditions.

Agreed, payments will only apply against posted transactions but my experience is they are applied intra month . That is why I setup a direct credit twice a week which in aggregate averages my normal weekly spend, then make additional payments if lump sums come out like utilities etc. The first is on a Tuesday to pick up anything over the weekend. It's a bit painful but it can be done. Or stick it in a drawer...