I have a 1.99% till the blanace is paid off offer from Citibank. We get these offers all the time (not usually this low), but always ignore them. We do not carry a balance on our credit cards and besides our mortgage and car loan have no outstanding debt. Our car loan is 5.75%. I talked to Citibank and asked if we could use the balance transfer checks for anything including paying off a car loan. They said regardless what the check was written for, even if we just kept the cash it would have the 1.99 rate until paid in full. We will not put anything else on the credit card to avoid paying different rates for different things. We also have no problem paying AT LEAST the loan payment amount we pay now towards the credit card each month. I calculated the savings, we would end up saving almost $3000 by shortening the length of time to pay off by 7 months.Can anyone see a problem with this? I’m just wondering if this works, how come nobody else ever does it?
I think it will work. And you’ll get your title now, rather than later. Most people don’t have the discipline to avoid putting other charges on the card. You’ll have to be careful to pay at least the minimum payment by the due date every month, or the interest and penalties will kick in. But overall it seems like a good idea.
The reason most folks don’t do this is that the credit card companies can change the deal at any time, for any reason.
You don’t say how much your car loan is, but the first problem might be will the credit card have sufficient limit to pay the whole car loan.
The second problem will be the ratio revolving credit debt to available limit. Carrying balances of more than 30% of your limit, hurts your credit score. If you score goes down, the credit card company can use that as a reason to increase the interest rate. And, yes, this does happen.
That’s a great plan you have worked out! As long as you’re able to stick it out how you have it explained here you’ll do fine.
You’re working the system and it’s going to save you money. And really, a lot of people do this, I find it’s just because people don’t talk about money in general that they don’t talk about these types of money plans.
Edit: The only reason you can lose a promotional rate is if you pay late or go over the credit limit. They can change your regular rate because of your debt to income ratio, but they can’t change your promo rate. Call and ask Citibank (ask multiple times on different calls to make sure you’re getting a consistant answer).
think your FICO rankings drops for any reason. you will possibly desire to be previous due in paying a application bill. Then the credit card organisation alterations your fee to 18% or 26%. in my opinion i could purchase a $2000 truck and save the variation. If it breaks down, i could purchase yet another $2000 truck.