CC Convenience Checks for DVC Purchase?

[White_Sox_Fan]

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

Unfortunately the way you calculated interest is not the way it works, we would all love it if it did. Every month you have to pay interest on the unpaid balance. In this case the monthly interest would be 2.9%/yr divided by 12 months/yr which is .242%. This would be multiplied by the outstanding balance ($ 26.83 the first month) the remainder of the payment would be applied to the principle. The next month the same thing takes place. The longer the term, the more interest you pay. As stated before, if you wanted to pay it off over t over three years the payment would be $322.31/mo and your total interest paid for the loan would be $503.25.

 

[dudelydude]

Unfortunately the way you calculated interest is not the way it works, we would all love it if it did. Every month you have to pay interest on the unpaid balance. In this case the monthly interest would be 2.9%/yr divided by 12 months/yr which is .242%. This would be multiplied by the outstanding balance ($ 26.83 the first month) the remainder of the payment would be applied to the principle. The next month the same thing takes place. The longer the term, the more interest you pay. As stated before, if you wanted to pay it off over t over three years the payment would be $322.31/mo and your total interest paid for the loan would be $503.25.

OH my goodness. Believe it not, I knew this. I just did a very similar explanation to my retired parents to help them with their plan to refinance their home with a new term. How that didn't click with me here, I'll never know. In fact, I did an excel spreadsheet to show the unpaid balance (each month) over the life of the loan and the interest they would pay at different rates.

Thanks to you and Nate for setting me straight. Now, I just need to see if I can raise my card limit and call my CC company to go over this process to see if I can do this (and better yet, do it at 0%).

Thanks again,
Joe

 

[hellerjw]

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

The other downside is that the interest wouldn't be tax deductible as mortgage interest like it is for most folks when financing through Disney. You would have to weigh the pros and cons of that vs. a lower interest rate to see which works out better for your particular situation.

 

[Mousewerks]

The other downside is that the interest wouldn't be tax deductible as mortgage interest like it is for most folks when financing through Disney. You would have to weigh the pros and cons of that vs. a lower interest rate to see which works out better for your particular situation.

This is true but for that little interest, the tax consequences are so close to nil as to be worth disregarding (IMO). Especially for those with a second home already.