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So my old car has had its time and I'm looking to buy a 3-4 year old car for around £9-10k. I have personal savings exceeding this amount so buying in cash is an option, however I have recently learned about 'purchase credit cards' with 0% periods which are appealing for a few reasons:

  • Provided I pay it within the 0% period (usually 18 months), it is free borrowing
  • Allow me to make monthly payments without getting locked into the high interest rates and long terms of a PCP or HP
  • Covered by section 75 in case there are any issues with the car
  • Builds a good credit history

However, I am not sure of my eligibility due to my age (23) and income (£25k) and do not want to be laughed out of the bank by asking for such a high limit.

I have had a student credit card for the last few years as well as paying for various bills, so I have an Experian credit score of 999, as well as having the cash to hand and a proven track record of paying all bills in full either on time or early.

My question is, what is the likelihood that any bank would accept me for an account such as this? I have never actually applied for a credit card before so am not sure how limits and terms are gauged, so any help is much appreciated.

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    You should consider whether a car dealership will accept payment by credit card before asking your bank. Unbeknownst to you, credit-card companies pay the merchant (car dealer) anywhere from 3% to 5% less than what you signed for, and so, if you whip out your credit card after signing a contract to buy a car for £10k, the dealership will either tear up the contract and show you the door, or insist on a new contract for x% more. – Dilip Sarwate Sep 21 at 18:16
  • I have bought a few cars and they often allow a maximum of $2-3000 to be applied to a credit card. – Aaron D. Marasco Sep 21 at 22:45
  • @DilipSarwate No need for the dealer to act in such a harsh way. They also could ask for a diffrent payment method. – glglgl Sep 22 at 5:48
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    This Autotrader article may be of interest. – TripeHound Sep 22 at 22:53
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    James, since everyone is ignoring your question and giving "general car advice". You probably (obviously) know this already, but don't forget, car upkeep is staggeringly expensive in the UK. (Indeed, that's thought to be one of the "freakonomics" reasons why, indeed, used cars are so incredibly cheap in the UK compared to anywhere else.) Unless you truly need an amazing car for some reason, I would urge you to consider buying the cheapest one possible. Don't forget that either a £500 car or a £10,000 car can equally, completely randomly, have a hugely expensive repair. Pure crap shoot – Fattie Oct 22 at 13:31
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These days there exist various credit card eligibility calculators which only conduct soft searches (ie they do NOT count as a credit application for credit file purposes). Try some of them and see if they give estimated credit limits (I'm not sure if they do or not).

Examples of such:

MoneySavingExpert

uSwitch

Compare the Market

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  • a great answer to the ACTUAL question – Fattie Oct 22 at 13:28
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I would suggest you to go for auto loans instead of credit card based purchase. Auto loans are pretty straight forward approach. The reasons to go for auto loans are:

  • Auto loans generally have lower interest rates compared to credit cards
  • How much are you sure that you will pay off the loan within 18 months ? If you are not able to do so, might get into bigger debt problem.
  • What is the guarantee that the credit card does not change the 0% interest ?
  • When you go for bigger credit card debt, your credit score will get affected, as credit to debt ratio will increase.

Personally, I prefer debit card over credit card. I would suggest you to save money and then buy car. If you very much need the car, go for auto loans.

Update I missed to note that you have got cash already. As you are already having cash, why are you complicating the things by going for credit card. Have enough emergency fund and pay as much as cash as possible and go for remaining portion as auto loan. Or if you could wait, save some more money and pay the car fully using cash.

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    He says that he’s got the money right now. He’s just looking for an interest-free loan for 18 months. – Mike Scott Oct 22 at 13:04
  • @MikeScott, thanks for updating me. I missed to note that point. – Venkataraman R Oct 22 at 13:20
  • @MikeScott, Updated my answer. – Venkataraman R Oct 22 at 13:22
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    @Fattie, I am considering the case, where in case the credit card is not paid on time. There is a probability and in that case, credit card debt can quickly get very high due to high interest rate – Venkataraman R Oct 22 at 16:18
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    a good point, @VenkataramanR – Fattie Oct 22 at 16:52

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