I'm looking at buying a car and while I actually have the cash to buy it outright, I'd like to keep some of the cash in my account and then pay it off over a year or two on an interest free credit card (I always like having spare cash easily available!)

The best offers seem to be 15 months 0% on balance transfers (Virgin and Natwest) but only 3 months on purchases so I'm thinking that I just buy the car on my current credit card and then get a Virgin/Natwest card and then do a balance transfer from my current credit card to pay it off – hence it being a 'balance transfer' not a 'purchase'.

Can anyone see any reason why this wouldn't work?

any balance transfer fees involved ?

Yes, good point – 2.9% but I can live with that as I don' think there's any way to avoid that.

Theres no reason it won't work. But you will most likely get a charge for your balance transfer to the next card if its 0%
Don't forget you can't/shouldn't get cash out either!

I can't see anything wrong with that. I'd make sure you get the second card first just in case you have any issues or delays getting the 0% cards.

Yes, fair point – that's what I was planning on.

Normally a 2-3% transfer charge involved.

Depends on which costs you less in the long run? Cash, all paid. Credit, balance over x months but fee involved, so will cost you more.
Credit card purchase would give you a little more security if you had any car problems.

The card won't be used for anything else, just the 'loan'!

Irrespective, I'd actually buy it on my existing credit card for the protection as mentioned.

The money would otherwise be getting interest paid in an ISA so the fee will be covered.

One of the key things in doing that, is to make sure that you dont have any outstanding balance on the card that you transfer to. Credit Card companies all apply the rule that the lowest interest rate balance gets paid off first. (i.e in your case the 0%) therefore you will pay interest on any outstanding balance until the amount that you transfered is paid off. I may be wrong about this last point but, I think some of them put the 3% fee for the balance transfer as a purchase on your card and I think that will be at your standard APR, and therefore will be the last to pay off and you will pay interest on that.

Can you buy the car on CC? Places I've been don't want this due to CC fees so only take debit cards. Worth checking with car dealer before hand.

Also one single late payment even by one day, and they have great pleasure in nulling the 0% rate and putting it straight back onto your APR

check to see if there isn't a fee from the car dealer for using a credit card- i know some add a few percent handling fee in an attempt to encourage the buyer to use their in house finance.

You are still 'protected' for the whole purchase even if you just pay the deposit on credit card to secure the sale, as long as it is over £100, so for a car it will be. You can pay on debit or cash for the remaining balance.

0% for 12 months no fee
http://www.moneysavingexpert.com/cards/balance-transfer-credit-cards#lowfee

Never use the card though, and make sure you repay as quickly as possible.

I used to make a fair bit of spare cash stoozing, but it gave me a headache.

Second what johnnyc says most dealers add a percentage on for paying with a credit card(no charge for switch though)

What car are you thinking of getting Dylan?

We have been (window) shopping for a new car today…..

Btw – a lot of car dealers apply a 2 or 3% surcharge on credit card payments, could add a fair bit to the screen price.

What you propose would work just fine, I did this to cut interest on a credit card and paid the debt off within the year. Like you I absolutely did not use the card for anything else so it was clear cut what had to be paid off.

You must be disciplined enough to pay it off within the agreed terms though. If you run over the deal time there could be hidden terms within the deal where they will sting you for interest, even back charge you interest. Do not trust the credit card companies, they will try to get money out of you anyway they can.

Tesco are doing 13 months interest free on purchases at the moment.

There is a chap that I work with that has one and its still interest free, 2 1/2 years after he took it out….

Tesco are doing 13 months interest free on purchases at the moment.

Yep, and I think there’s better out there now. I’m sure someone is doing 16 months 0%apr on purchases. Have a look at Money Saving Expert!

We’ve just paid £8.5k for a new kitchen on 2 Tesco cards. We’ve got the cash, but we’ll get interest on that for a year or so, then pay off whatever is left on the cards. And we’ve had a fair wedge in Clubcard Vouchers off it too! 🙂