CC Convenience Checks for DVC Purchase?

[Pidge]

Has anyone ever used one of their credit card convenience checks to pay for a DVC purchase? We recently received one with a rate of 3.99% until the balance of the purchase is paid. This is a better rate than we would get at Disney or TSS Financing, but having never used something like a convenience check, we weren't sure if there could be a "catch" of some sort. (We know there is a "transaction fee" of 3% of whatever amount we would borrow using a convenience check.)

Thanks for any advice,

Pidge

 

[oldcarrot]

They allow charge cards, so they should allow this. Also if you charge the first $2500 on a Disney VISA, there is no interest for 6 months.

 

[TosaTrio]

Has anyone ever used one of their credit card convenience checks to pay for a DVC purchase? We recently received one with a rate of 3.99% until the balance of the purchase is paid. This is a better rate than we would get at Disney or TSS Financing, but having never used something like a convenience check, we weren't sure if there could be a "catch" of some sort. (We know there is a "transaction fee" of 3% of whatever amount we would borrow using a convenience check.)

Thanks for any advice,

Pidge

You will probably have the transaction fee which would be extensive. I have recently seen some offers with no fee and low interest rate (to get you to sign up for a new credit card) but i do not recall from who. If you do purchase something with a convenience check make sure the credit card doesn't have a balance and DO NOT use it until you have paid off the balance. All payments go toward the cheapest interest rate purchase and not the new purchases, which mean you will pay the higher interest.

 

[tammymacb]

That is how I bought my contract.

I had a 2.9% life of loan check. What I had to do was write the check to myself and deposit it in my checking account. The bank held it for a week to clear.

Then, when it came time for closing, I had to take the money out in the form of a bank check and mail it in.

I *think* I paid a hundred something for the transaction. Once. Now I just pay the 2.9 financing which is nothing compared to other rates.

I'll have my contract paid off in 3 years.

Hope it helps!

 

[speedyf]

That's how we purchased our last car (2 years ago). We were able to actually write the check direct to the dealership. Most of those offers have a 3% charge...$3 minimum / $50, $75, or $99 maximum. That's usually the norm for the bigger banks that I use (Citibank & Chase). I have also had a 1.9% deal on a smaller bank card with a 3% charge...no maximum. It cost me $300 for a $10,000 check...but, was still better than 7% or 8% over 5 years that the dealership was offering at the time.

We are looking at doing the same thing for DVC.

Speed

 

[dudelydude]

 

[jjohnson]

That is how I bought my contract.

I had a 2.9% life of loan check. What I had to do was write the check to myself and deposit it in my checking account. The bank held it for a week to clear.

Then, when it came time for closing, I had to take the money out in the form of a bank check and mail it in.

I *think* I paid a hundred something for the transaction. Once. Now I just pay the 2.9 financing which is nothing compared to other rates.

I'll have my contract paid off in 3 years.

Hope it helps!

This is what we did too for half of the purchase price.

 

[bangzoom6877]

We have a CC with a 0% interest rate, including balance transfers. We bought a DVC resale so we could not use a CC directly for the purchase. So we used the CC convenience check and deposited it into our bank account so we could send a cashier's check to pay for the DVC. The fee was $75 total (which is the limit for the fee for using the CC check on this card). So since we saved over $4,000 on our BWV purchase over buying directly through Disney, and it will be paid off before the 0% interest is up, the $75 fee was fine with us. Had we bought directly through Disney we would have put the purchase right onto the 0% CC.

 

[dudelydude]

That is how I bought my contract.

I had a 2.9% life of loan check. What I had to do was write the check to myself and deposit it in my checking account. The bank held it for a week to clear.

Then, when it came time for closing, I had to take the money out in the form of a bank check and mail it in.

I *think* I paid a hundred something for the transaction. Once. Now I just pay the 2.9 financing which is nothing compared to other rates.

I'll have my contract paid off in 3 years.

Hope it helps!

Am I crazy or is this just ingenious? I mean, this should be a sticky!!! Why wouldn't everyone do this? If you can't afford to pay cash for your contract and you have a credit card, why not get a loan from your credit card company at 0% or even the 2.9% that was mentioned. This is so much lower than every other loan mentioned on here and it is for the life of the loan. So no variable rate, no balloon, no high rate? This could mean the difference between someone buying a DVC contract and someone NOT buying a DVC contract, especially in this current, dismal, economic climate we are in.

Let me know if there is any downside to this.

Thanks,
Joe

 

[PIERCEDRN]

Am I crazy or is this just ingenious? I mean, this should be a sticky!!! Why wouldn't everyone do this? If you can't afford to pay cash for your contract and you have a credit card, why not get a loan from your credit card company at 0% or even the 2.9% that was mentioned. This is so much lower than every other loan mentioned on here and it is for the life of the loan. So no variable rate, no balloon, no high rate? This could mean the difference between someone buying a DVC contract and someone NOT buying a DVC contract, especially in this current, dismal, economic climate we are in.

Let me know if there is any downside to this.

Thanks,
Joe

Only obvious catch is that you need to use a "clean" card without a balance.
If you have a balance on the card already, the principal will only be applied to the %1.9 interest amount first. If you already have a balance that amount will accrue interest at the higher rate without being touched for three years. Once the DVC loan is paid off, then you would start paying off the original balance. For every 1000 of the original balance, you would pay about $300 in interest over the 3 years at 9%.
So get a new card with a zero balance and you will be fine.
BOB

 

[mooneyda]

I had thought about doing that once but I thought if i missed one payment on the CC my interest could potential balloon. In fact I had a good interest on one CC and for what ever the reason the payment did not get processed and my interest ballooned to like almost 25 percent

 

[Pidge]

I called our credit card company for more info. Found out that your minimum payment each month would be 2% of whatever amount you write the convenience check (assuming nothing else is on the account). Also, five years is the maximum amount of time you have to pay off the balance.


Pidge

 

[johde]

Only obvious catch is that you need to use a "clean" card without a balance.

Along that same line. Don't use that card for any other purchases afterward. Most credit card apply payments to the lowest interest rate first. So, once you make the purchase, I would take the card out of you wallet so I'm not tempted to use it. I purchased with a Convience Check and didn't do it so I ended up moving the balance to another card after a couple of years. Fortunately at that time the interest rate was a little bit lower and I had the available credit empty on another card to do it.

 

[Jeremy&Susan]

The big down side that some have touched on is IF you are late or miss a payment. This may be no fault of your own; mail was lost, electronic transaction between your bank and the CC company just did not happen for some reason, whatever. When that occurs the CC company will start hitting your balance at whatever the default rate is, 14%, 19%, 23% some even much higher.

The second down side has been covered as well and that is the CC company will apply payments made first to the low interest loan. So until the 2.9% loan is paid, whatever you owe at a higher rate will continue to compound at the 13-20+% rate.

 

[LIFERBABE]

My solution was to set up online auto payments for the minimum due. We pay more thru BillPay, but set up direct thru the CC company to pay mins, that way you are never late no mater how they try to trick you.

Always use a clean card and dont use it for anything else until paid off.

 

[Mousewerks]

I called our credit card company for more info. Found out that your minimum payment each month would be 2% of whatever amount you write the convenience check (assuming nothing else is on the account). Also, five years is the maximum amount of time you have to pay off the balance.


Pidge

So, let's run some hypothetical numbers. To make it realistic (you may or may not have this much credit on your card), lets say your purchase price is $11,100. So, minimum payment is $220. Assume a 2.9% rate on the CC, at the end of your five years you'd have a balloon payment of $1472.36 and you'd have paid $2100 in interest. That's worst-case.

Again taking a purchase price of $11,100 and the 2.9% interest rate, you'd have to make payments of $319.41 to pay off the note in 3 years (36 months).

Seems like a no-brainer to me....

Nate

 

[dudelydude]

So, let's run some hypothetical numbers. To make it realistic (you may or may not have this much credit on your card), lets say your purchase price is $11,100. So, minimum payment is $220. Assume a 2.9% rate on the CC, at the end of your five years you'd have a balloon payment of $1472.36 and you'd have paid $2100 in interest. That's worst-case.

Again taking a purchase price of $11,100 and the 2.9% interest rate, you'd have to make payments of $319.41 to pay off the note in 3 years (36 months).

Seems like a no-brainer to me....

Nate

I tried Nate...I reeeeealy tried, but I just can't grasp what you did there. It was my intention to pay cash outright for my DVC contract, but then got cold feet with the economy and THEN saw this is thread as a viable option.

Could you break down that math for me? The following may just show you what an idiot I am.

$11,100 x .029 = $321.90
$11,100 + $321.90 = $11,421.90
$11,421.90 / 36 mos = $317.27

This, of course, assumes the following...
*Does not account for the aforementioned $75 fee
*Does not account for annual maintenance fees.
*Assumes a clean credt card with enough credit, no other charges, no late payments and all that jazz.

So where does the balloon payment come from? I would like even payments over 36 or maybe even 60 months if possible and no lump sum payment at the end. Do-able?

Thanks,
Joe

 

[Mousewerks]

I tried Nate...I reeeeealy tried, but I just can't grasp what you did there. It was my intention to pay cash outright for my DVC contract, but then got cold feet with the economy and THEN saw this is thread as a viable option.

Could you break down that math for me? The following may just show you what an idiot I am.

$11,100 x .029 = $321.90
$11,100 + $321.90 = $11,421.90
$11,421.90 / 36 mos = $317.27

This, of course, assumes the following...
*Does not account for the aforementioned $75 fee
*Does not account for annual maintenance fees.
*Assumes a clean credt card with enough credit, no other charges, no late payments and all that jazz.

So where does the balloon payment come from? I would like even payments over 36 or maybe even 60 months if possible and no lump sum payment at the end. Do-able?

Thanks,
Joe

Sorry Joe, I re-read what I had written and I don't think I was clear enough. For the first part, I took the 2% minimum payment for the CC check which on $11100 is $222 (minor error on my part up above). If we plug that into a financial calculator to recognize the 2.9% interest rate on the money, we find that at the end of 5 years (60 months), there remains $1485.75 of principal and hence the balloon payment. That 5 year limit was what was specified by the previous poster. Adding up all the payments and the balloon payment will give you a total of $14805.75 or 3705.75 in interest payments.

Now, we take that $11100 initial number, the 2.9% interest rate for 36 months (3 years) and we ask what will my payment have to be to support the interest and pay off my note in 3 years? Plug the numbers into a financial calculator (I could find the equations but I like my HP17B) and you get: $322.31. Multiply the $322.31 * 36 = 11603.16.

I think where you got confused is that you can't just take a straight percentage if you're going to be making monthly payments. The interest accrues monthly and you have to pay off the interest before paying off any of the principal. That time series is a somewhat complicated equation which again, is why I like my calculator.

Hope this helps...

Nate

P.S. I too don't include usage fees or maintenance fees and assume a clean credit card.

 

[4 Little Bears]

When I purchased a resale contract last year, I had a 0% offer from Bank of America. I figured there was no way I could lose as long as I paid my bill on time (automatic payments twice a month) and paid off the balance before the trial period ended (I had 8 months before interest would begin accumulating.) Overall, the only thing I had to pay for was a $75 transfer fee.

 

[Mousewerks]

When I purchased a resale contract last year, I had a 0% offer from Bank of America. I figured there was no way I could lose as long as I paid my bill on time (automatic payments twice a month) and paid off the balance before the trial period ended (I had 8 months before interest would begin accumulating.) Overall, the only thing I had to pay for was a $75 transfer fee.

I think that, for those who have decent credit, you'll be seeing a lot more of these type of loans in the near future. All of that (stolen) money the government is pumping into the banks has to go somewhere and with the general populous being skitterish when it comes to loans, there will be some good deals to be had.