camkid

ok so im contimplating if im going to pay off my car loan with a credit card. i have a 18 thousand dollar loan for my camaro at 9% interest!!! anyway what i would do is get my citibank card which is 0% for 1 1/2 years and then a fixed rate of 3% after that and pay off my loan company. it would save me about 4 thousand dollars and i would be able to pay it off about two years faster. any opinions on this???? i worked at citi bank and it seemed like people did it all the time, has anyone tried this before?

speedfreak440

iTrader: (9)

As long as you are being honest with yourself about the interest rate & you have the self-discipline to set a regular payment amount and stick to it then I think it is a great idea. Do you have an $18,000 limit on your card?

TXZ28LS1

iTrader: (5)

i dunno man. i try not to use my credit card.

black_knight

iTrader: (1)

Yes, I did a similar thing with one of my vehicles. As long as you make the minimum payment to your 0% card every month and are ready to pay it off completely when the 0% wears off, then you will be fine.

speedfreak440

iTrader: (9)

Credit cards are a wonderful tool if used with proper discipline and respect, NOT as another form of income. If you do not have self-discipline then you should set fire to any & all credit cards you own and run the other way.

JohnnyC

Beware - the "3% fixed after that" interest rate is usually not really "fixed". The rate starts out at 3%, but if you read the fine print you will see that the credit card company usually maintains the right to adjust the rate based on a number of economic factors. I think you would be better off finding a better loan interest rate from a bank or credit union. Just make sure you read the fine print.

camkid

yeah its a citi platnium card and it is a 3% fixed rate unless you default for some reason. the interest rate will then be prime 21.45% plus variable 15.35% until the balance is payed in full.....so i cant even think of not paying it! but even after the 3% it will be a hell of alot cheaper than the 9 im getting now..... i have a 25k limit on my card now

9silverbird8

iTrader: (19)

You could always transfer the balance to another card after the 0% period is over, then start the whole process over again

black_knight

iTrader: (1)

I've done that, too, and as long as you have the money in the bank to back it up, then go ahead.

SweeTbone

iTrader: (8)

If you do switch it to a credit card, I would set it up for automatic payments from an bank account. If you are late for a payment, you'll get topped out at the 21.xx% rate. It might take 2 late payments, but that's how they get people. That whole fine print thing that was mentioned.

On a rant, I bought my 2000 Trans Am in Feb. 2005 at 5.75% interest. 4 weeks ago, I bought my wife a 2002 Grand Prix GT, and the interest is 8.6%. WTF?! 5 year old car gets lower interest that a 4 year old car? I know it's the way car economy is going now, but damn.

Silver1969Camaro

I've seen many young people do that before and all they do is crash and burn. It's playing with fire, IMO.

JohnnyC

You should just pay a little more each month on your current 9% loan (if you can). This will offset the interest rate by paying down the loan principle,and will reduce the ammount of interest that you pay over the life of the loan. That way you can pay off the loan sooner and not wreck your credit with a long line of credit card mistakes.

BigDaddyBry

iTrader: (15)

JohnnyC hit the nail on the head. READ THE FINE PRINT. Don't believe everything you hear and make sure you read the whole agreement. If you lose your job, if you get another credit card or close an account, those are just a few reasons they could use to change your interest rate.

'Trust'

iTrader: (24)

Best idea so far!!

speedfreak440

iTrader: (9)

Excellent idea, just make sure there are no penalties for paying down early, another "fine print" issue.

novi2000

iTrader: (2)

im just talking here but with a credit card isnt it the apr of the remaining balance?? Like if your APR on your credit card is in fact 3%. and your loan with the bank is 9% the 9 is the fixed rate on the total amount. but isnt the credit card 3% of the remaing balance every month?, so you would be paying 3% of 18000, and then 3% the next month on whatever is left. if this makes sence and i could be wrong but i thought thats how credit cards worked?

JohnnyC

I understood about 3% of what you just posted...

99camarosupersport

iTrader: (6)

agreed

BigDaddyBry

iTrader: (15)

If I understand what you are comparing correctly, then my answer is your car loan in calculated in a similar fashion, but broken down into equal monthly payments over the life of the loan.

camkid

ok the way a credit card works is that you pay on daily average balance of interest.....so if you have 1000 dollars at 3% you pay that on that month, if you make a 500 dollar payment you now have 3% at 500 dollars you have to pay.....in a vehicle loan you have 3% on a 1000 dollars, you make a 500 dollar payment you now owe 3% of 1000 not 500 dollars BECAUSE ITS CALCULATED ON TOTAL LOAN BALANCE....BUT YOU USUSALLY PAY THE INTEREST UP FRONT SO IF YOU OWE 1000 AT 3% YOU PAY THE MAJORITY OF IT THE FIRST AND SECOND YEAR....and yes you can have a zero interest and transfer it when it is expired, but you can only do it 2 times or so because each card runs a credit check and can see that you are only taking advantage of the zero interest.....but remember buisness is buisness so they might do ita credit card is a great tool to save money on interest rates....THE ONLY BAD THING ABOUT THEM IS THAT THEY ARE VERY UNFORGIVING IF YOU DEFAULT. I WORKED A CITIBANK AND SAW PEOPLE WITH A DEFAULT OF 31% ON 75 THOUSAND DOLLAR LIMITS MAXED AND WERE UNELIGBLE TO GET IT BACK DOWN, WE COULD NORMALLY CHANGE THE INTEREST BACK DOWN TWO TIMES AND THATS IT.....THATS LIKE 1200 DOLLARS A MONTH!!!!! IM GOING TO TAKE ADVANTAGE OF IT SO ILL SAVE ABOUT 6000 DOLLARS IN INTEREST OVER THE LONG RUN AND PAY MY CAR OFF IN HALF THE TIME.....MY BEST RECCOMENDATION IS TO HAVE IT WITHDRAWN FROM YOUR ACCOUNT AUTOMATICALLY!