Creative Loan Payoff?

[bnlbebes]

I just got an offer for a small loan tied to one of our credit cards with a lower interest rate than the balance of our DVC loan. Has anyone else used such an offer to payoff the balance on their loan?

 

[Lisa F]

One thing you need to be aware of is that DVC does not report your loan to credit reporting agencies. I don't know much about the specific loan you are talking about but if it's through a credit card company, it might look like credit card debt on your credit report, which is not the best thing to have on your report. Also, you will probably not get to claim the interest as a deduction on your income taxes anymore (though it is probably not enough of a difference to make it worth it). Basically I would be wary of adding such a large amount of essentially "credit card debt" to my credit report.

Lisa

 

[Maistre Gracey]

I am closing in on paying off my DVC debt that was transfered to my credit card. So far, I have paid for more than 1/2 of my DVC by transfering to a CC. I thought it would be no problem, but it has proved to be a pain in the behind. I am only using 0.0% teaser offers, so I must periodically transfer money around. After this round of CC is paid, perhaps I will transfer another 10k. You don't want to do it all at once, incase those teaser rates dry up.
Yes, it's a pain, but I am saving some serious loot.

Good luck...

 

[momsully]

We also used a teaser offer on a credit card to pay off our DVC. We are currently at 0% through 2005 and I am hoping to pay it off by then. For us the math was right to make it worth taking on the extra credit card debt to save on the interest.

 

[JimC]

Make sure you read ALL of the fine print. Most of the teaser rates have very costly trap doors that are very easy to fall into. And some of those trap doors may have nothing to do with that particular card.

You also may want to be careful of using too many teaser rates, going from card to card. It is possible that could lower your FICO score, what lenders use to determine what interest rate to charge you.

 

[Maistre Gracey]

Originally posted by JimC
Make sure you read ALL of the fine print. Most of the teaser rates have very costly trap doors that are very easy to fall into. And some of those trap doors may have nothing to do with that particular card.

You also may want to be careful of using too many teaser rates, going from card to card. It is possible that could lower your FICO score, what lenders use to determine what interest rate to charge you.

Yes, indeed. One example of the "trap door" is that your 0% transfers are paid before other purchases. This could lead to high interest on the other purchases. The way around this is to have the card totally paid off, then make the transfer, then do NOT use that card until it is once again paid off.

I am only using existing credit cards to shuffle money, and I am not applying for a whole wad of new ones. There always seems to be (so far anyway) a current card trying to give me zero interest.
As I said, I am only a little over half paid on my DVC, so this could dry up at any time. That is the reason why I don't transfer the whole balance at once...