Is this worth doing?(credit card ?)

[antkim]

I have a balance transfer promotion going on right now with my cc company. 2.9% until balance is paid in full. I have 2 car loans that I pay-1 is at 6.99% and 1 is at 6.24%. I have to check into my limit but I was thinking of combining the 2 onto the 1 card(0 balance right now) and still making the same payments that I do now. Make sense? I suppose this is a dumb ? because if I can save any amount of money it's probably worth it

O.K.,opinions?

Kim- I think my brain is fried today!!

 

[mom2boys]

Do the math. If you WILL make same payment to the credit card company each month as you are currently making on the car loans, then you probably would come out ahead. That will take a lot of discipline. I would be tempted to send the credit card company less if I had a lot of other expenses in a particular month - such as Christmas or a Disney trip. Only you can honestly answer how disciplined you will be with this.

 

[Toby'sFriend]

If you continue to make the same payments and there are no transfer fees on the Credit Cards and the balances are significant ...

then yes it makes sense.


You especially need to be careful with those Credit Cards though. Many of them have clauses that will hike your rate up to 18 to 23% if you make late payments.

 

[DoeWDW]

If you're late on any payment will they end the promotional interest rate?? Please read the fine print carefully on this one - I've seen that particular clause in the fine print on more than one occasion.

 

[Harley Chick]

You also have to look at the rules for the CC. Sometimes, if you miss a payment or it's late, they jack the interest rate up over 20%. Can you afford that on the whole balance?

 

[Piglet]

Just make sure they don't charge a fee to tranfer balances.

Melinda

 

[mrsv98]

I would be very careful because cc companies are notorious for adding sneaky clauses that will hike your interest rate in a heartbeat.

If it is at all possible, I would look into a home equity line of credit. Not only would you get a really low interest rate (ours is 4%) but the interest is generally tax deductable, a double bonus.

Just a thought.

 

[antkim]

IF I did the math correctly by doinf this it would save me about 1600.00 over the life of the loan BUT like you all said that's IF I'm diciplined enough. I can honestly say that normally I am VERY diciplined when it comes to the bills but you never know! LOL So I'm not really sure it's worth the risk!

Kim

There is no tranfer fee

 

[KimRaye]

WHOA! Hang on there a second! I'm not in banking anymore but, car loans are different and, the interest used to be figured in over the life of the loan and, paying off early didn't really amount to as much as you think so, in effect, using the CC would mean you're paying interest twice!

First call you make...to the bank who loaned the money originally..see what the payoff amount is. Go from there.

Remember: I am NOT a banker/financing expert, by any means, anymore.

 

[DocRafiki]

I have pretty much the same situation with only one car and had the same thought when I got that offer. BUT... I may be paying that car loan off for more than 2 years, and I'm sure I'll move in that time. Every time I move, I wind up losing some bill and making a late payment. Or with my luck, something would get lost in the mail or an online payment wouldn't go through. Then I'd get stuck paying 20% on the loan. Also, if I want to buy a house in the next few years, the auto loan is going to help my credit score out whereas credit card debt will lower it.

My car loan's not like KimR described. I could pay it off the principal today and not ever pay any more than this month's interest. It still isn't worth the risk for me.

To think of it in simple terms:
I have a $10,000 loan
At 6%, I pay $600 in interest per year
At 3%, I could save $300 per year
At 20%, I would pay $2000 per year

The risk of an extra $1400 per year isn't worth the $300 savings OR the effect on my credit score.

 

[janette]

I've moved some balances to CC cards with very low interest rates. You do have to be careful and read the fine print. Most transfer fees are $50 at most but they can vary. To make sure the payment is on time I call and have the minimum payment automatically made from my checking account. Not all CC's offer this and you can always pay more but that way you have some insurance over being late, just make sure the money is there.

I'd also check on the balance of the car loan, the majority of the interest is paid in the first part of the term so you might not be saving as much as you anticipate.

 

[antkim]

I think I am going to play it safe and stay right where I am! Too many risks I guess and I'm not willing to take them! Thanks for all the advice-you helped a lot! That is why I love the Dis!

Kim

 

[MeanLaureen]

I agree with KimRaye - that's what I thought - that interest in car loans are figured into the payments (unlike home loans) and you don't get out of them by paying them off.

So if you are transferring a car loan you will still pay the 6+% and on top of it the 2.9%

So - you are actually paying out money towards nothing!

 

[Nancy]

Smart move in not doing this. CC companies are so bad now. No more grace periods. If your payments are 1 day late, you have the fee and they hike your interest rates. Not only are they doing this for their cards, but one offer I received said in fine print that if I had any late payments on any cards they "could" raise my rate. Which basically told me they would.

Not only that, but with a car loan (at least they did this when I had my last loan) if I couldn't make a payment that month for some reason, they would let me defer it to the end of the loan, all I had to pay was the interest for that month. I did it twice during the life of the loan, and luckily at the end of the loan I paid off a little early so I never made those 2 payments and extra interest.

 

[Pembo]

Another thing with cc's....they often accumulate interest daily! Car loan is monthly. Check into a home equity if you own your home. That's what we did and I'm only paying 5%, I think. We consolidated our 2 car loans.