CC for a Cash Advance to Purchase a Car Then Balance Transfer?

Wakety-Wack on 15/03/2018 - 11:19
Last edited 19/03/2018 - 21:04

Hello, I am in need of a car and do not have the savings at the moment to pay for one outright, so I was looking towards a credit card.

Any help would be much appreciated as I have never owned a credit card.

I was thinking of using a credit card with a cash advance then doing a balance transfer to another. If I balance transferred a cash advance would the new card take it as a cash advance and charge at that rate or just as a balance transfer?

If I we're to get a credit card and then a cash advance of 10k (for example the ANZ Frequent Flyer Credit Card with 2% on cash advances), could I then balance transfer the amount to another credit card (for example the Westpac Low Rate - Online Offer with 0% p.a. for 30 months and 2% balance transfer fee) and pay as much off as I can within the 30 months?

I have read I should make one repayment with the initial card before a balance transfer as it could hurt my credit rating otherwise?

Does this sound at all possible? or is this all just a silly idea and I should be looking at an alternative?

I would really appreciate your suggestions and input as im sure there is a ton of hidden nasties I am unaware of.

Thank you.

Edit

TLDR…

Here is the best Method taking in all the below considerations, especially Killerbala's input:

-Open a bank account with a Bank not just a credit card company.
-Then open a credit card with that same bank, and make a small purchase so I am in the negative.
-Apply for a BT credit card with another bank, looking for the best possible rate on BT fee and longest interest free period, and have the $x amount sent to card 1.
-Wait until the amount has cleared and I am in the positive and have it sent to my new bank account under the same bank.
-Withdraw or transfer to my old bank account, and close the credit card and bank account opened for this purpose.
-Use funds interest free for agreed term and pay back before it ends /or/ BT again to another provider before term ends for more interest free time.

Financial

Comments

  • Seraphin7 on 15/03/2018 - 11:27
    +5

    At the risk of the obvious, just be aware that a 2% cash advance fee, plus a 2% balance transfer fee, plus 1 month worth of interest (the point about making 1 repayment prior to transfer) is starting to add a fair bit to the cost of this vehicle.

    It might still end up being worth your while, but the above could add ~5% to your purchase price.

  • dcep on 15/03/2018 - 11:31
    +3

    just make sure you'll 100% approved on the new card & BT limit , else you're fked

  • original15 on 15/03/2018 - 11:39
    +1

    Sounds like a disaster waiting to happen, what $$$ car are you looking at? (Inb4 $80k high yield so OP spins a profit comments)

    • Wakety-Wack on 15/03/2018 - 12:31

      I thought it sounded a little to good to be true :) I was looking at a used 4wd/suv like a ford territory, thought I could get one under 10k and use the little left over for any rego ect..

  • dazweeja on 15/03/2018 - 11:48
    +1

    On finder.com.au, there's a Bank of Melbourne Vertigo Platinum Card offer for 26 months with 1% transfer fee (and other cards with 0% fee and $90-99 annual fee):

    https://www.finder.com.au/credit-cards

    Also, the Bendigo Bank Low Rate First Mastercard should have a 0.5% cash advance fee (and $29 annual fee) but not sure if they'd go to a 10K limit:

    http://www.creditcardcompare.com.au/cash-advance-credit-card…

    • Wakety-Wack on 15/03/2018 - 12:32

      Thank you, they look much better than what I found, I appreciate your help!

  • nickomac on 15/03/2018 - 12:01
    +1

    What about picking up a card that has 0% on purchases for X months? There's 0% for 14 months on the Virgin Money Flyer Card - https://virginmoney.com.au/credit-card/compare-our-credit-ca…

    • Wakety-Wack on 15/03/2018 - 12:33

      Thank you, I was probably going to look at a private seller though, so thats what steered me towards a cash advance :(

    • D C on 15/03/2018 - 13:50
      +1

      I tried buying a motorcycle with a credit card once. Didn't amuse the dealer much (CC fees cut into their profits a bit too much).

      • Wakety-Wack on 15/03/2018 - 20:34

        Thanks for the info!

      • [Deactivated] on 16/03/2018 - 22:25
        +1

        As a cash advance you're effectively withdrawing cash and so the seller won't be up for any fees. However to the best of my knowledge all credit cards treat cash advances as immediately incurring interest, among other potential fees. There may also be sub-limits on cash advances as to how much you can advance per day, so it may take a while to advance the full amount. You'll also trigger fraud warnings most likely as you're basically doing what someone that stole the card would do….

    • Samsungnote10 on 17/03/2018 - 12:19

      that for purchases only, cash advances incur interest from day 1, plus there is cash advance fee, it really starts adding up

  • pantsparty on 15/03/2018 - 12:03
    +1

    How much do you have in savings? What kind of car do you want?

    • Wakety-Wack on 15/03/2018 - 12:34

      Not enough :(

      I was looking at a used 4wd/suv like a ford territory, thought I could get one under 10k and use the little left over for any rego ect..

      • pantsparty on 15/03/2018 - 13:11
        +2

        I wouldn't buy a used car around $10k from a dealership. You will have to buy from a dealership to pay on your credit card. The same car can probably be purchased privately for $7k. Can't you just save some money for a few months? Maybe the correct answer is that you cannot afford a car at the moment.

        • Wakety-Wack on 15/03/2018 - 20:35

          Yeah thats why i was leaning to a cash advance to take advantage of a private seller price. I probably could but it may take me a while, I appreciate your input :)

  • Quantumcat on 15/03/2018 - 12:07
    +1

    Would it be better to consider a regular car loan (reading the fine print carefully of course), or a personal loan?

    • Wakety-Wack on 15/03/2018 - 12:39

      I was thinking that too, just thought the whole interest free thing would have me better off in the long run?
      I was looking at a secured vehicle loan through the APS benefits group at 9.90% p.a. also.

  • tsunamisurfer on 15/03/2018 - 12:24
    +2

    Do I have it right? The OP is going from zero credit cards to applying for 2 in quick succession for the limit of a car?

    • angelkulit025 on 15/03/2018 - 12:38
      +1

      just one CC and using that cc for cash advance to pay for the car.

      • tsunamisurfer on 15/03/2018 - 12:42
        +2

        I was thinking of using a credit card with a cash advance then doing a balance transfer to another.

        If OP has no card, then needs one to buy and then BT to another? That's how I read it.

        • Wakety-Wack on 15/03/2018 - 12:46

          That is correct, using one with a minimal cash advance fee for a cash advance, then doing a balance transfer to one with a long interest free period and closing the first card account.

      • Wakety-Wack on 15/03/2018 - 12:43

        Yes, but then doing a Balance Transfer to take advantage of the interest free period while closing the first card account.

    • Wakety-Wack on 15/03/2018 - 12:41

      Yeah :) it just seemed like the easiest way to get 10k for a vehicle, taking advantage of balance transfer interest free periods to make payments.

  • jsb on 15/03/2018 - 20:26

    Why cash advance? Get the credit card and pay for the car using credit card. They will prob. Charge 1% as card payment charges. Then you will have time till the statement date to pay without interest. In the meantime get the other card with free balance transfer. You will be good to go. Even if you don't get approved for the second card before the due date of the first statement, pay the minimum balance or whatever extra you can and wait for the balance transfer to be done. 2 things to consider here. 1. First card should have lowest purchase rate. 2. Second card should have free balance transfer on application. That's it.

    • Wakety-Wack on 15/03/2018 - 20:40

      Thank you for your helpful input :) I was looking at a cash advance as I was going to buy through a private seller and steer clear of the dealerships, but i appreciate the tips to consider!

      • jsb on 15/03/2018 - 21:18
        +2

        Understood, but consider 1 more thing then. Cash advance rate and purchase rate are 2 different things in credit card and cash advance rate is usually very high. So, you will have to time it properly. Get the first card. As soon as you get it, activate it and apply for second card with balance transfer on application. Once you get the second card, DO NOT activate it. Get the cash advance from first one and then activate the second card. Your balance transfer will kick in after you activate the second card. This will ensure that the balance transfer will count towards the cash advance and interest charged will only be for a few days.
        Also do check card issuer of both cards before applying. You will not be able to do balance transfer between cards if they belong to the same credit provider. For eg. Coles and citibank, Bankwest and Westpack etc. There is a list on finders. Just search Google you will find it.

        • Wakety-Wack on 15/03/2018 - 22:07

          Thank you jsbhatia, you really know your stuff :)

          So if i take all your advice into consideration do you think this is a good idea or am I better off just getting a secured car loan between 5 - 7% ?

        • Wakety-Wack on 16/03/2018 - 17:21

          Also I have read online that people have done a balance transfer to a card with no balance then taken the positive credit as a cheque to self?

          Could I do a balance transfer to a card with $0 balance then close the account and get the positive credit in a cheque or transferred to my bank account?

        • Samsungnote10 on 17/03/2018 - 12:22

          @Wakety-Wack:
          as far as im aware the only main stream bank that allows cheque to self is citibank

          when you do a bal transfer ,the debt is transferred from the original card to the new card,
          so your second card goes into negative, not positive, so you wont have a positve balance

        • Wakety-Wack on 17/03/2018 - 13:57

          @hellohello123: thank you for your advice :)
          I was recently told by another member that citi has stopped the cheque to self now :(
          I am also thinking of using card 1 for a small transaction to go negative then BT 15k from card 2 and taking the positive amount now on card 1 as cash via cash advance or trying to close the account and getting a cheque.

  • jhaley3180 on 16/03/2018 - 07:46
    +2

    Instead of cash advance. Register the new card for PayPal, open a second PayPal account, then send yourself the money. You'll need to pay the PayPal fee. But you get points, it will count as a purchase and you would be entitled to interest free/low interest on any of the interest free/low interest new card deals

    • Wakety-Wack on 16/03/2018 - 09:31

      Thank you, I just did some reading online and some people have mentioned:

      • Get a credit card with the highest possible limit and do not touch.

      • Get another card that has the Balance Transfer with a long interest free period.

      • Balance Transfer to the first card (max 80-95% of first cards limit) that will now be in credit and do a cash advance of the positive credit then close the account.

      Does this sound possible? People put as much as they can on their mortgage ect to lower interest over the term.

  • blawler05 on 16/03/2018 - 08:35
    +1

    Do not buy a car with a Credit Card. I would avoid buying a car on finance, but definitely do not put any on a credit card.

    • Wakety-Wack on 16/03/2018 - 09:32

      Thank you, it was just the long interest free period that was swaying me, then the option to balance transfer again near the end of the term to continue paying no interest.

  • Brendoo on 16/03/2018 - 16:42
    +1

    Doesn't interest start incurring instantly on a credit card if you do a cash advance instead of a purchase?
    I'd get a car loan. Your financial situation seems to sound like you may not be able to fully pay it off before interest kicks in (even if you did get a delay in interest being charged). Credit card interest rate is obviously significantly higher than a car loan. Be careful.

    • Wakety-Wack on 16/03/2018 - 18:28

      Yes i believe so, but if i were to balance transfer out i would have no interest for the new cards promotional interest free term.

      If I could not fully pay it off before the interest kicks in couldn't i just do another balance transfer?

      Thank you for your advice, I appreciate it.

  • [Deactivated] on 16/03/2018 - 18:11

    I'm pretty sure that if you apply for a "cash advance" you cannot do a credit transfer to another institution, it is only if you have been using your CC and have built up extra credit.
    If you donot have a CC and apply for a cash advance you have strict criteria to adhere to on application and am sure you have to tell what it's for over a certain amount and if you tell them it's for a car they will very much used that as a collateral for the application.
    Good Luck and really cash advance in CCs for a car is a dead end approach.

    • Wakety-Wack on 16/03/2018 - 18:32

      Thank you, I am thinking of doing a balance transfer to a new card then taking the positive balance in a cash advance or cheque to self ect.. this way I can take advantage of an interest free term and even balance transfer again when that gets close to finishing as I would still be better off than paying interest on a car loan.
      I appreciate your input :)

  • HeWhoKnows on 16/03/2018 - 19:22
    +1

    Its been said before many times here and I will say it again:

    Only buy the car you can afford to buy with the CASH you have.

    Borrowing and paying interest to buy something that loses significant value from the moment you pay for it and forever after is the most backward step you can take financially.

    • Wakety-Wack on 16/03/2018 - 19:32

      Thank you, very wise words and i appreciate it.

      But the point of this is to not pay interest.

      • HeWhoKnows on 16/03/2018 - 19:37

        Well if you have the cash to fully pay after the interest free period ends thats well and good.

        But rather pointless these days as you dont earn any interest on it either (maybe a few $$$)

  • Killerbala on 17/03/2018 - 02:39
    +1

    What you are thinking is possible but the only exception is not to do cash advance till you get the balance transferred to your card.

    e.g. I assume you have a credit card already and let it be a ANZ with 5k limit and you had used $500 in it. Apply for a new credit card ( let it be Westpac ) which as no transfer fee, 0% interest with possible 14-20 months of interest free period.

    Once your westpac is approved, the maximum you can transfer is 95% of your approved limit. let’s say it’s $20000 then you can only transfer $19000 to ANZ. Once the money reaches your ANZ you will have $18500 in excess which can be transferred to your ANZ everyday banking account for a fee of $5 or something. Even though this is a cash advance ANZ can’t and won’t charge you any interest as the money you are withdrawing is not the credit they gave you but the excess you have on the card.

    Then you have to make minimum monthly payments which goes directly to your outstanding balance and should pay everything before your interest free balance transfer period of 14-20 months end.

    Hope it helps !

    • Samsungnote10 on 17/03/2018 - 12:25

      are you sure, i thought even positive balances of credit ,if withdrawn you still have to pay the cash advance fee of 1% or whatever it is

      • Killerbala on 17/03/2018 - 16:54
        +1

        Sure because I have done that and had withdrawn money from westpac and they charge only $2.50.

      • kingsville on 28/03/2018 - 10:46

        In my experience the cash advance fee doesn't get charged if you leave the card with a positive balance (not a cash advance on credit)

    • Wakety-Wack on 17/03/2018 - 14:02

      Thank you Kilkerbala that explains alot! I appreciate your input aa im sure others will too! :)

      So even with the smaller 5k limit it still goes ontop as excess?

      • Killerbala on 17/03/2018 - 16:57
        +1

        Yeah the money coming in will be considered as a payment to the receiving card and anything above the outstanding is excess which you can withdraw, provided you have a current or savings account with the same bank for a small onetime fee which changes from bank to bank.

        • Wakety-Wack on 17/03/2018 - 19:13

          Ok thank you! I will open an ANZ bank account first :)

          So the 5k limit is not a limit to a positive amount only a negative amount?

    • Wakety-Wack on 17/03/2018 - 20:17

      Is this a correct method?

      -Open a bank account with a Bank not just a credit card company.
      -Then open a credit card with that same bank, and make a small purchase so I am in the negative.
      -Apply for a BT credit card with another bank, looking for the best possible rate on BT fee and longest interest free period, and have the $x amount sent to card 1.
      -Wait until the amount has cleared and I am in the positive and have it sent to my new bank account under the same bank.
      -Withdraw or transfer to my old bank account, and close the credit card and bank account opened for this purpose.
      -Use funds interest free for agreed term and pay back before it ends /or/ BT again to another provider before term ends for more interest free time.

      • Killerbala on 18/03/2018 - 01:54
        +1

        Bang on!

        • Wakety-Wack on 18/03/2018 - 16:21

          Thank you! I couldn't have done it without your helpful input :)

          Just to clarify when people refer to only being able to get 95% of their credit limit transferred, is that from the second BT cards limit?

          And if card ones limit is say 2k can u BT from card 2 a greater amount?

          Thanks

        • Killerbala on 18/03/2018 - 22:22
          +1

          @Wakety-Wack: you don’t have to worry about the card 1 limit as it’s just used to recieve money. So you can have a card with just $1 limit and move $50000 from card 2 to it. Point is BT can be done only between two credit cards of the same person.

          Happy that it helped you.

        • Wakety-Wack on 19/03/2018 - 18:25

          @Killerbala: Thank you Killerbala! you have made it all so much easier to understand!, I'm sure that its not just me who will benefit from your help, I really appreciate your input :)

        • Wakety-Wack on 22/03/2018 - 20:48

          @Killerbala:

          So on application to St Georges for a "Vertigo Platinum BT card", it asks:

          Do you have any credit cards/store cards?, then

          -Financial institution,
          -Credit limit,
          -Amount owed,
          -Would you like a balance transfer to your new St.George credit card?,
          -Existing credit card number , and
          -Amount to transfer.

          Then notes "I have read and agreed to the Balance Transfer terms and conditions and acknowledge I can only balance transfer a total of 80% of the approved credit limit."

          I also had to click either 'Allocate for me' or 'Specific amount' under "What credit limit would you like?" on page one.

          I have a NAB card with a 500 limit I have never used, but wouldn't that raise alarm bells if I entered:

          -Credit limit - $500
          -Amount owed - $0
          -Would you like a balance transfer to your new St.George credit card? - Yes
          -Amount to transfer - $40000

          Should I just say I owe $38000 on a $40000 limit?

          (I have an ANZ card with an 11k limit being deivered next week) but I was hoping the BT applications would not want as much info as this :P just the amount i needed BT'd

          Thanks

        • Killerbala on 23/03/2018 - 09:53

          @Wakety-Wack: Mostly they won’t ask those questions and even if they do. Tell them you are forecasting big purchases in the near future ( probably a marriage in the family or education, something that’s common but should sound valid) and would like to plan for it in advance by making use of their current BT offer. So it gives them more insight of you as a person and confidence on your repayment because you are planning your finance in advance.

        • coolhead on 23/03/2018 - 11:45

          @Killerbala: hey mate - lot of info already so thanks for that.

          Now i need to make a big payment of about 30k and doing it via creadit card so i can earn points (CBA).
          I need the money as well and don't want to pay it right away so thinking of doing a balance transfer.
          But would that mean both my cards old one and new one should have a limit of atleast 30k and 34k respectively?

        • Killerbala on 28/03/2018 - 07:29

          @coolhead: yes if you want points for your purchase. I don’t think CBA will give you points if you pay with excess money on the card but I’m not sure. Have a chat with CBA and let us know

        • coolhead on 28/03/2018 - 10:41

          @Killerbala: that i know for sure and if i make the card in credit and they pay CBA will not pay rewards. rewards are only paid upto your credit limit.

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