Question:
I recently recieved some of those balance transfer checks from my credit card company for 3.99% until the balance is paid in full. There would be a $75 fee. My auto loan is 7.2%, would it be a good idea to use that check to pay off my $12,000 auto loan so I could have the lower interest rate?
Answers:
It depends-what would be the minimun payment? If you pay just the minimum, you'll never touch the principal. Do it only if you're willing to double down and pay the loan off fast!
Yes, good idea. As long as the interest rate doesn't change.
BAD IDEA, JUST THINK OF THE RATE OF INTEREST!
hey this is really a worst idea. just calculate the service tax. and service charge.
I'd be willing to bet the credit card offer has a default rate of 30% if there are any late payments. If you are one day late only one time. your screwed. Thats what the credit card company is counting on.
NO! NO!
Read the small print. That 3.99% is more than likely introductory. Also, a late (even 1 day) or missed payment could lead to an outrageous rate.
You didn't say how many months you have remaining on your car loan or what the current payment is. If you provide both, I can calc something for you probably. I am hesitant to recommend transferring a large balance to a credit card as these companies are typically merciless and if you miss one payment or pay a day late, the interest rate will sky rocket to 18% or more. Read the fine print, for sure!
You have to be very sure that you can make a payment every month on time. Also you should continue making the same payment that you would have on the original car loan. Otherwise, you could end up paying more in the long run. Do you know if you can set up an automatic debit from your checking account to the credit card company? That would help, if you are careful about not overdrawing your checking account, of course.
Good idea - if you pay it off at the same rate as you were going to pay off your auto loan. If your loan was for 36 months, pay off the credit card in 36 months - use a loan amortization calculator to figure out what your payment should be. Do not pay the credit card's minimum payment. For a 36 month loan payed off at the same rate you could save $500 in interest. If it is a 60 month loan, you would save $1,000 in interest.
Bad idea - if you are going to pay only the minimum due - it will cost you more in interest in the end.
Make sure the interest is going to stay at 3.99%. Also, what will this do to your available credit on your credit card. If it brings it above 50%, then this is a bad idea. You also want to make sure you have some credit available for your use without going above the 50% threshhold.
You need to consider the term of the loan and what conditions if any affect the interest rate on your credit card.
It sounds like it might be worth considering BUT if the card rate goes up very much you wont have saved anything.
I would talk to a bank manager (assistant) and get them to work it out in detail for you.
I swear by balance transfers, but read the fine print.
The transfer fee is usually 3% of the amount you are transferring. Make sure it's a flat fee of $75.
Also, the low interest rates are usually good for 6 -14 months, depending on the card.
If everything checks out, go for it!!!!
Also remember in addition to all the other great advice people have given...it's not just if you are late on this card that the rate will jump. If you are late on any card or loan payment your card company has the right to raise your interest rate as well!
Mathematically it's a good idea if you keep the payments the same as you are making now. In reality, though, it's just better to pay off the vehicle as quickly as possible and never borrow money.
The general rule is that it is a bad idea. Consider the minimum payment is 10%. If you don't pay the minimum, your rate goes way up. If you are planning to pay $1,700 to $2,000 per month on your car loan, you might save around $45 in this case because of the special low rate. Whether to do it or not depends on how ironclad it is that you will have that money each month. Better be pretty sure of it,or the risk reward ratio is hard to calculate and probably unfavorable.
Sounds good !
But you can shop for a better deal and may find one with another credit card.
If your loan is half paid for, you already paid about 70% of your interest. Whether it's a car loan, personal loan ist or 2nd mortgage, you will about 70% of the interest on the first half of the life on your loan. That's how the banks make their money.
BAD IDEA.
If you so as much miss the payment date by one day, that beautiful interest rate can go from an impressive 3.99% to 24.9%.
Keep the auto loan.
The grass seems greener on the other side until you have to mow it!
You have been warned.
Credit card balance transfer is one of the preferred ways to get rid of credit card debt and is used by many people to get immediate relief. Credit card balance transfer essentially means that we transfer our outstanding balances from a high APR credit card to a credit card which offers low APR's. A 0% Intro APR credit card is the preferred credit card to transfer balances, but because of the widespread misuse of such credit card offers, credit card companies have withdrawn all such offers.
Indeed balance transfer saves a lot of money and can save things from going worse, but many people simply don't know the right way to do balance transfer. This article takes a look at the correct process to initiate and complete the balance transfer.
The first thing to look out, when a person wants to transfer his balances is a credit card which offers the lowest apr rates and lowest balance transfer fees. Many online credit card companies offer credit card comparisons. It is indeed a good practice to search for the credit cards using their services and decide on a credit card which offers the maximum savings. It is important to note here that balance transfer APRs depend on a person's credit history. If the credit card in question offers the lowest rates, it is definitely for those with the best credit ratings. There are different balance transfer apr's for people with lower credit ratings. So, it becomes imperative that one chooses the credit card which offers the lowest apr and balance transfer fees for his credit ratings. Read more from: http://www.credit-card-gallery.com/artic...
I dont have the best of credit, well in fact its kinda bad, but I was able to get car loan since I do have a job which is mainly what this place cared most about for me. They are one of these places that have multiple sources and they say like 99 percent approved. So I would give this site a try.
http://auto.deal4-you.com
Good luck.
Don't do it!! For a better rate, go to a local credit union; they are almost always lower on their loan rates.
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