Best options for borrowing £3,000 for a year

[Gorondola]

Hello, we have had an unexpexted expense (funeral costs of a close relative) and are now struggling for cash as we have an upcoming commitment that we will need to pay for in February. We need to borrow approx £3,000 that we would pay off in 12 month. We both have a credit card with our bank which we use for everyday stuff and pay off in full every month so no interest charged. But using this to spread out £3,000 would be very costly and I am wondering if we already have this credit card, can we have another one with the same bank with 0% for a year? Our current cards were like that, but a long time ago. Or should we go to a different bank? Does it make sense to use the ine we have the mortgage with or better to separate? Also, would having an additional credit card affect things when we come to remortgaging in 1.5 year's time?
Thanks in advance, sorry if the questions are trivial.

There’s loads of 0% credit card deals around, you can apply for a separate one and as long as payments are up to date it won’t affect remortgaging or credit rating.

Thank you! Probably a stupid question, but would taht be for purchases only, or can I 'materialise' the £3,000 at the start? I know you can't withdraw cash normally but could I transfer it from the credit card to my current account?

If you spend the money on your current credit card, you can then get zero percent on credit transfers for the next eighteen months by transferring the balance on your existing card to the new one with the zero percent offer. Although they say zero percent, you do usually have to pay approx three percent on the transfer, but this can be added to the total amount owed. Three percent is much better than the usual twenty percent charge per annum.

Thank you! Is it better to do a balance transfer or to get a new 0% card? Unfortunately, the cost of the funeral is not on the credit card as it had to be paid by bank transfer. So our current credit card balances are low.

You can use a new 0% credit card for all your spending on for a while. If your family expenses are like mine it won't take long to rack up 3000. Can February commitment be paid for with credit card?

Stop when you get to £3000 and then calculate a monthly repayment strategy to pay it off before the 0% period ends.

Would something like that work for you?

Moneysavingexpert is a good source of information about 0% deals. Also look at your current banks to see what they can offer. Some banks will let you have 2 cards simultaneously.

You're looking for a 0% balance transfer: have a look on Moneysaving Expert for current deals.

The money it transferred into your account, you then owe that + a % fee- usually fairly low. They are banking on people not repaying within the 0% repayment window, after which there would be a high monthly interest.

If you are organised it's the cheapest way of borrowing, aside from a personal loan.

Yes, you are right, probably best way forward to do all spending on new card for a while.
Not sure February commitment will work from credit card unfortunately. It is a group holiday where we are all chiping in for costs.

Is that really the case? From what I read it seemed that balance transfer is to move exisiting debt, but maybe I didn't understand it well?

Thank you, you are right, I have checked my banking app and indeed, I can have 2 credit cards and there is one with a 0% offer. I think I will take this out and come up with a repayment plan because I am already having sleepless nights, so don't want more anxiety.

Sorry for your loss OP. Does the relative have nothing in their estate to pay the funeral costs? If you have already paid for funeral costs it may be too late to get help with them but it might be worth checking out. If someone has nothing in their estate the LA / or hospital where they died is responsible for arranging and paying the funeral. If relatives are arranging and paying but having difficulty there can be help from the DWP.

Thank you! Relative lived abroad and is survived by spouse, so no money is being released from the estate at this point. They didn't have savings, pensioners in a low income country.

@Gorondola who would have paid for the funeral if you had not done so? low income country but the funeral is not low cost???? were there no other relatives able to chip in??

I think what you want is a 'money transfer' 0% card, where you get a certain amount transferred into your bank and then pay it back at 0% for however long. Look on money saving expert they have a section on them. I think the terms are usually a bit shorter but once it's on a card you can balance transfer easily if needed down the line

It is my motherinlaw that has died, there is no question that we paid for her funeral. The expenses are a combination of the funeral costs and mainly the travel costs to fly over at short notice as she died unexpectedly. If we didn't have the upcoming holiday costs then it probably would be managable, but we cannot cancel it as it is a group holiday so all costs are based on the number that agreed to go.

Ah, thank you, that must be the term I was looking for! Will look into it asap.

Yes, sorry- got my names jumbled there probably! I'm a bit 'word' dyslexic. You can definitely get money transferred to your bank account.

It's also worth approaching your bank, they do have a variety of options especially as this was due to funeral expenses. Generally a bank loan is cheaper than credit cards if you are not able to get 0%

Thanks everyone, this has been really helpful. I have applied for a second credit card that has a 0% offer. It also has a money transfer option for a 5% fee, so will try to manage without that using it only for purchases, but good to have the option to fall back on.