K.C. asked:
I have an auto loan at 16% (I know a little high but when I got it my credit wasn’t as good as it is now) and I have a credit card that has an intro balance transfer rate (which includes just them writing a check to someone) for 6 months and after that ana interest rate of 12% which is still lower than my car rate — I don’t have enough available credit on the card to pay it off but was going to pay about $2000 in a principal payment I still owe in the high $13K on my auto loan…..Ieaving about $11K on my auto loan….I pay my credit card bill on time and pay between $300-$500 a month on the card so I pay well over the min payment amount….Is this a good idea — I’m just trying to get my principal down cause it’s not going down by much with the interest rate being 16% —- also a refi is not an option as I owe more than the car is worth
Thank You I will not use my credit card to do this — I’ll just try and make more the the monthly payment to my card
To my car, lol
Joanne
I have an auto loan at 16% (I know a little high but when I got it my credit wasn’t as good as it is now) and I have a credit card that has an intro balance transfer rate (which includes just them writing a check to someone) for 6 months and after that ana interest rate of 12% which is still lower than my car rate — I don’t have enough available credit on the card to pay it off but was going to pay about $2000 in a principal payment I still owe in the high $13K on my auto loan…..Ieaving about $11K on my auto loan….I pay my credit card bill on time and pay between $300-$500 a month on the card so I pay well over the min payment amount….Is this a good idea — I’m just trying to get my principal down cause it’s not going down by much with the interest rate being 16% —- also a refi is not an option as I owe more than the car is worth
Thank You I will not use my credit card to do this — I’ll just try and make more the the monthly payment to my card
To my car, lol
Joanne
Tanya
The balance transfer will probably have a fee attached to it. Usually these are at like 3%.
I’d trust a 16% car loan to stay at 16%. I would not trust a credit card rate to stay where it’s supposed to stay beyond the intro period.
My advice would be to transfer as much as you think you can pay off within the 6 months. Once that time is up cancel the card and find another one and do the same thing again.
Comment by an swers — July 31, 2010 @ 2:30 am
Nathan
No. Don’t do it.
Depending on how old you car is, I would suggest refinancing the loan. Just make double car payments to save interest.
In the future NEVER sign on a loan that is more than 3-5% above the current interest rate on a mortgage. Check mortgage rates virtually anywhere.
Comment by paradigm81 — August 2, 2010 @ 4:30 pm
Erin
Bad idea. You are already carrying balances on that credit card. Carrying credit card balances of more than 30% of your limit, hurts your score. Shifting part of your car loan to that credit card will increase your debt ratio to much higher percent. It would cause your score to drop.
Credit cards are notorious for increasing interest rates. Many are increasing minimum from 2% or 3% of the balance to 5%.
Instead, work on paying off the credit card balance completely. It is never a good idea to carry balances. Only charge what you can afford to pay in full each month.
Then, start paying extra towards the principal on your car loan — even $10 will help.
Comment by bdancer222 — August 4, 2010 @ 12:27 pm
Angel
about it you can get information from here
Comment by Negrat — August 5, 2010 @ 5:11 am
Anita
That would be a bad idea, if you are delayed on a car payment you will pay a minor late fee, if you are late on a credit card payment they can double your interest rate and insist payment in full for the balance owed, you need to read the small print. Credit cards are not your friends you need to pay them off as quickly as you can and only keep them for an urgent situation. Do not get stuck in the credit card trap.
-But, every other thing you buy on the card will be incur interest payments. I’m never in favor of treating credit card debt as something you will pay off over time. Better to keep the two separate and pay the payment on the auto loan and quickly eliminate the entire credit card debt. Credit card debt pulls you in and all of a sudden, your good financial situation turns bad. Don’t let this happen.
-Not a good idea. The bank will say they will wave the transfer balance charges, but what they are not telling you is the interest rate they are charging. When you have an auto loan, there are charges of interest, now your adding rates to your interest so what is happening is that you keep on paying the interest.
Comment by Heather — August 5, 2010 @ 8:34 am
Bernard
NO NO NO!!!! – that is insane – I guarantee your 12% rate cc won;t stay at 12% forever and whatever amount you pay with a cash advance will cost you 3-5% just for teh advance fee and the minimum monthly payment from that cash advance amount will be 2-5%. you will NOT reduce your car payment any and will only INCREASE your monthly credit card payments by $40-100/month – it makes ZERO sense – your CC rate could go up to 30% at any time
Comment by Doctor Deth — August 6, 2010 @ 2:02 pm
Caroline
if it makes things easier and cheaper and you have more money in your pocket go for it
Comment by rennickelizabe — August 7, 2010 @ 12:12 am
Eddie
Dear ,
I will recommend you
Regards,
Comment by Sandy — August 9, 2010 @ 6:41 pm