Credit card / finance?

[blake12336]

I go back to work next month and am currently using OHs car. However this is only temporary and I will need a car to travel to work, I don't have any money saved (stupidly) so am considering either a credit card or getting a car on finance. What are the pros and cons? I've never had a credit card before but it seems safer than getting finance?

 

[MrsBop]

I should imagine the interest will be less on a credit card, car finance always seems so much plus with a credit card if you got a 0% interest one for 12 months and then kept switching cards each year you wouldn't technically pay any interest at all.

 

[sue_88]

Credit cards are the most sensible option for borrowing these days in terms of interest and re-payment rates.

I don't have either as I don't agree with them (just personal reasons), but over the two choices, I'd go with a credit card.

Fully explore your options though, you can get good deals on both it just takes a lot of time and effort to find the deal that will suit you the best.

 

[Pearls18]

We bought our last car from Car Giant and they didn't allow people to purchase cars on credit cards (not that we were trying to but was in the t&cs) unless you have a really good credit rating in which case you could get a credit card with a really high amount and do a balance transfer, but the balance transfer will still cost a little and you'll need to pay the money back within a certain amount of time to keep it interest free depending on the card.

I don't know anything about car finance and whether it is worth it or not as we paid cash, but another option would be to get a competitive bank loan.

 

[lozzy21]

A lot of the car finance company's do 3/4 years interest free credit so it may be worth looking into

 

[MrsT&Ben]

Some garages charge you a fee for buying your car on a credit card.

I would look at car finance first because I loathe credit cards, but that is just from bad experiences in the past

 

[Ceejay123]

I think if I couldn't afford a car, I'd want to buy quite a cheap one to start with, until I could save up for a more expensive one, (maybe £1000) so i wouldn't want to do finance with a company, as they tend to be a lot more expensive cars. I'd personally use a credit card for a cheaper car, then save up for a more expensive car after paying off the credit card x

 

[blake12336]

Thanks everyone, my last car only cost me £500 and it was great! I will definitely go with a cheaper car until I can actually afford a nice one, looks like credit card may be the best option, do they have minimum amounts you have to pay each year? It's just I won't have much money to pay it off straight away, however, am expecting a large lump sum next year so would be able to pay it all off then?

 

[Pearls18]

Interest free deals are usually 12 months-18 months depending on your own credit rating, but you will have to make a minimum payment every month, will depend on the card but it's not usually a massive amount. You shouldnt get a credit card and take cash off it though, this is the most expensive way to borrow money and looks bad on your credit rating, if you're buying second hand you'll need to look into balance transfers, there will be a monthly minimum payment and a balance transfer fee for the amount.

 

[Mummy Bean]

most credit card require you to pay 5% of the balance a month. there lots of interest free deals and allows you to be flexible with how much you want to pay each month.

but as other have said if you buying from a car dealership they often charge for using credit cards but i doubt they would give you finance on some thing under a 1000...but not sure on that one.

and most cards charge about 3-5% to make a transfer to cash.

you could buy a car of ebay and pay using a credit card to avoid any charges. just make sure you view the car before commiting. Also some dealers on Auto trader accept Paypal...which means you can use a credit card.