advice re loan v credit card

[jeanjeenie]

hi have been offered loan for house improvements at decent rate - my friend thinks it is better to do this on a O% card - does anyone know how to do this - my builder doesnt accept credit card s and i cant ask the credit card company thatquesstion re how to do it as clearly eveyone whould do this way rather than loan as it s cheaper...any advise from the savvy - as im not very !

Have no idea, but bumping for you.

If you can find a credit card which is offering 0% interest on purchases you could make essential purchases eg food shopping on the credit card leaving cash available to pay the builder. Obviously it depends how much essential spending you do each month which could be done on a credit card and how much the builders bill is. Some credit card companies do also allow you to transfer any existing credit card debts to a 0% deal - but be careful because they usually only offer either 0% on transfers or purchases.

Also if you can't pay off in full by the end of the 0% offer, the rate is often higher than normal.

So you do really need to weigh up how much money you are borrowing and when you can repay it.

Take the loan. The interest on a credit card is variable and after your introductory period the rate could shoot up.

Also, in the current financial climate you may not be able to get a loan/mortgage at a later date. You should also bear in mind that moving from one card to another can damage your credit rating, making it more difficult to get credit in the future (have a look at Martin Lewis' site moneysavingexpert.com for more info)

If you do decide to go for the credit card you should be aware that there are balance transfer fees to move a debt from one card to another.

So, unless you think you will be able to pay the credit card off before the deal expires it makes sense to take the loan. Personally I think anyone who would take a debt with a variable rate during the credit crunch is crazy!

HTH

As a few others have said, it depends how long you will be able to pay it off in. Have a look at this link

Also, even though you think that the rate for the loan is good, do keep checking around for better loans. www.comparethemarket.com/loans/ has a good loans calculator too.