Paying Cash or Credit for DVC

[LIFERBABE]

I'm considering purchasing 150 pts for BCV. I have contacted DVC to check availability.

We will most likely use Magical Beginnings for our 2003 pts. April UY.

We are receiving a lump sum of money and Im considering paying cash or putting the balance on a fixed low rate CC instead of financing with DVC.

Has anyone done this and if so what are the pros and cons of buying with a CC.

Also how much do the dues increase yearly?

Thanks

 

[floridafam]

I think paying cash or financing is a personal choice and only you can decide which is best. Obviously, you save a lot of interest charges if you don't finance for a long period of time.

Do you happen to have a Disney Visa. I've read a lot recently about members using it for DVC.

Putting the balance on a low rate credit card sounds like a good option.

You can also give Disney 1/2 down and pay off the other 1/2 within one year and I believe the interest rate is only 4.95% when you do it this way.

You have a lot of options. Good luck with your decision.

Dues have stayed pretty stable. I think someone else will have detailed info on how much they have gone up or down the past few years. There is a cap on how much they can raise dues per year.

 

[Maistre Gracey]

Well, remember that if you finance it on a CC, the interest will not be tax deductible. Depending on the terms of the CC, it still may be a better deal. I would say cash is the way to go. I believe the DVC financing rate is around 10%, and it is not super likely you would get that return on your money from other sources.

Dues can and will increase. There does not seem to be any rhyme or reason as to the amount, but figuring an average of 3%-4% per year over the long haul seems to be reasonable.

Good luck...

 

[floridafam]

Good point, Maistre Gracey.

I forgot about the tax part.

 

[tdrcDVC]

If you use the disney credit card, I believe the first 6 months are interest free and you can earn rewards. Other than that its your choice.
You may also get some tax advantages using a home equity line.

 

[musical2]

Or you can do what we did. We had cash also to pay for our DVC points. But instead we paid with our credit card that gives us rewards then we we received the credit card bill we paid it off in full. That way we had the reward credit and the DVC paid off in full at the same time. I figured we might as well have the credit card work for us.

Bart

 

[jel0511]

We did what musical2 did. We charged the amount on our Amex, and then paid it off. Nothing like buying DVC and getting a free airline ticket in the process!!!

 

[LIFERBABE]

We were thinking of the CC rewards also. I was not even sure we could use CC so it is good to know others have.

The tax deductible part is not really that enticing to us, as we would be locked into that rate and we would lose alot of flexibility, short of paying the entire balance off. I'd rather pay less interest upfront.

I wouldn't mind paying my CC balance off over 24 months as long as my fixed rate remained fixed. We could then bank the money and I would be saving interest over financing through DVC and paying it off in a manageable amount of time.

Does paying cash shorten the closing process or affect closing costs.

Thanks so much!

 

[Maistre Gracey]

Originally posted by LIFERBABE
The tax deductible part is not really that enticing to us, as we would be locked into that rate and we would lose alot of flexibility, short of paying the entire balance off. I'd rather pay less interest upfront.

As long as your CC rate is below about 7%, I agree with you.

Originally posted by LIFERBABE
Does paying cash shorten the closing process or affect closing costs.

I don't think it shortens the process, but it does cut down on the paperwork!

Good luck with your decision...

 

[AnnaS]

We did just like Lori and Musical (Bart) for our initial purchase and each add-on. We knew we would pay for it with cash, but we wanted the reward/miles on cc. They can all split the charge over a two month period which is what we did so we did not go over our limit. Good Luck in your decision, it is really up to you and what makes you comfortable.