Hello all. I am new to the credit discussion but have been reading lots and slowly fixing up errors that I found upon receiving my credit report from equifax. I am still waiting for my transunion and national credit bureau reports (I am in Canada). I have a question for you all. I have a loan that is 8000 dollars at 8.7% fixed. My credit card is at a 0 balance and I can transfer the amount onto my credit card (no extra fees for the transfer) at a rate of 5.9 %. Is there any reason I should not do this?
Is the 5.9% for the life of the transfer or only for a short time? If the former, I see no reason not to. If the latter, only do it if you can pay it off before the introductory period expires, or you'll be paying a higher rate on the balance.
The only other thing I'd watch out for is what the minimum payments are on the credit card. It's usually a percentage of the balance. Sometimes this could mean that, initially, the payment could be higher than the amount you're paying on the loan. If that's an issue, then check it out. If you won't have any trouble if the payment is higher for a while, go ahead and do it. On the credit card, the minimum payment will reduce with time as the balance decreases. That's why it may initially be more than the loan. Over the long run it's a good deal, as long as you can make the payments.
Also find out what happens if a credit card payment you mail early mysteriously arrives late. Does that automatically and permanently jack up your rate something higher than what you have now? It may not be worth the risk to save 2% on an $8,000 loan. The $200 you are trying to shave might cost you much more in aggravation.
How much interest is saved depends on the term of the loan. It's probably compound interest. Hopefully, the card has a website. Go online and pay the minimum every month as soon as it bills. That way there is never a late payment. I do this with all of my credit cards. Then if I don't have the amount for full payment until closer to the due date, and they don't post it in time, it only costs a little interest. I'll have no late fee and no lates to be reported.
Thank you for all of your responses. I pay all my bills online and I asked them the exact amount of the payments for what I wanted to transfer..I also checked out the fine print and it was exactly what they stated. It's 3 percent of the transferred amount. I did the math and it is way lower than what I am currently paying. I am paying 400 per month on the loan as it stands now and will pay 240 per month wth the credit card. I plan on continuing to pay 400 per month by paying the expected balance (240) and the extra (160) bi weekly.
Hello all. I am new to the credit discussion but have been reading lots catt ========================= Ask Hedwig What & Where you should be reading first . Hedwig don't like me telling you.
Just what I was about to suggest Contuning to pay the 400 will do 2 things for you. 1* The debt on the credit card will be paid off sooner than the original account would have been. 2*It will also save interest on the credit card .
