Hello friends, I am having a high interest car loan and I recently got an offer from Amex blue about balance transfer. The offer is 3.99% on BT till paid off. I have done balance transfer in the past from other credit card account but I am not sure if Amex allows transfering balance from a Car loan. Anybody has any idea about this? Also, what impact would this have on my credit score? and currently car title is with the bank that gave me car loan so what would happen to car title if i transfer balance to Amex. Please explain me and help. Thanks a lot.
If the loan is paid off, the bank should notify your department of motor vehicles, and you should get a new pink slip with their name removed from the leinholder field. Amex isn't offering the BT to become a secured creditor on your vehicle. Some BT offers are only for paying off other debt, while some allow depositing directly into your checking account, from which you could pay down debt or make purchases. From a lender risk perspective, I wouldn't think it would matter, since your total debt is the same, but the monthly payments are probably reduced. What is your overall debt to credit limit ratio, and how much of your monthly cash flow is going to debt service? Call Amex regarding whether they will honor the BT offer in paying off a loan.
My overall debt to credit limit ratio, after the balance transfer to Amex that I am planning to do, will be aroud 40% or so. Thank you.
Can anybody please help me here? I am bit worried about the possiblity that Amex may increase APR in future. Well, If I pay on time and don't do anything wrong, is it reasonable to belive that Amex won't increase APR which is fixed at 3.99%. Please if somebody can share expreience , It will help me in making my decision. thank you.
They most certainly could in the future...for any number of reasons....your balance, your payment history, your credit worthiness, etc. Bottom Line is you are playing with fire and have come up with a real bad idea. For instance, have you gone to a credit card interest rate calculator and figured out what your payments would be at 3.99%? Further have you included what minimum % AMX would charge each month ( ie. 2.0% of balance)? Have you figured what the minumum payment would be each month and compared it to what you are paying now?? You neglected to tell us your interest rate from the bank or the term or the balance. Finally, I don't know how disciplined you are, but if you fall into the trap of many credit card holders and ultimately start making the minimum payment on let's say a 15000 balance (dont know what yours is cause you didnt give us the facts), it would take you 50 years to pay off that loan....don't need a college education to figure out that this is a dangerous play. Why don't you try to refinance to a lower rate with another bank?
Being in charge of, and managing your finances does require discipline. If you have that discipline, you can, however, take advantage of opportunities as they come along. Whether a BT loan is better for you than what you have does depend on both the interest rate, and the minimum payments, i.e.: whether it fits into your available cash flow. If you have the discipline, there is nothing preventing you from paying down a CC balance on the equivalent of a fully amortized loan schedule over the same period as remains on your existing car loan, assuming the minimum CC payment is equal or less than your existing car payment. In this case, you would come out ahead if the CC BT rate is lower than what you now have. You are also looking at what your FICO score is likely to look like in this case, so you don't spook other lenders. Both your CC contract, and your BT terms, include conditions under which the CC company can raise your rates. Usually this includes defaulting on other accounts, possibly even other companies' accounts. In addition, the terms of the CC account itself can probably be changed, or closed, arbitrarily simply with notice to you. If the BT offer is advertised as "fixed until paid" they will probably specifically list the terms under which it could be raised, i.e.: defaulted accounts, bankruptcy, etc. I have seen the main CC terms altered arbitrarily, even with no negative credit information, based on debt to credit limit changes, changing perceptions on levels of consumer debt, Fed jaw-boning, what they thought they could get away with, etc. I have generally found that the better companies honor "fixed until paid" terms, but I have had no defaults that would have resulted in changes under their written terms. Be aware, however, that you may want to check out what the minimum payment would actually be with the BT. I have seen wide variation recently in minimum payments, for accounts with similar interest rate terms. The offers typically emphasize the interest rate, with little mention of minimum payments. To some degree, in the credit marketplace you are buying a lower minimum payment with a higher rate, and if you get a very low rate, in effect they are locked into it for a shorter time. They hedge or limit their interest rate risk, just as they do for 0% offers, which typically are for short periods. One place you could save some, if you choose to pay off your car loan, is to raise your collision deductible. The bank probably required a low deductible as a condition of the loan, whereas it may make sense for you to carry a larger part of that risk in exchange for lower premiums on what is after all a depreciating asset.
