I have $9,000 left to pay on my 2001 Accord car loan at 10.2% (payments are $338 a month). I'm able to make two car payments each month, but I've got $12,000 of available credit with Citibank on an Illumina Card. If I can get a good balance transfer rate from them (say under 5% for 12 months), would it make sense to pay the car loan off that way. I already called them and they said they do this all the time with car loans and the title would come to me, not Citibank. My only worry is that Citi, and any other bank for that matter, can raise your APR at any time for any reason, even if you're a good customer paying on time. My gut feeling is to just make two payments a month and pay the car off that way. If Citi's profits slow for some reason, they could increase the APR's on their credit cards and I would hate to owe $9,000 at a high rate. Any opinions would be appreciated. Thanks!
How long have you been paying on the car? If it is only a short time, I don't think that loan will count towards your credit score. Also, if you charge the full $9,000, then your credit score may drop because you are near the high limit on that credit card......... Just a thought.
Should be no problem, citibank doesn't jack your rate up. I've done some various things (moving moving around for friends/family) that has put me near 90% utilization of my $25K citi card, and have never been questioned. I've got one of the lowest rates on this board from citi, and they are most pleasant to deal with. That 0% until 2004 is in alot of peepz mailboxes, 0% for a year adds up to alot!
I've had the car loan for 12 months, so it's definitely showing on all three reports. And yeh, that's true...maxing out the card (almost) would affect my score. But I'll be able to send $800 each month towards that debt, so it will go down pretty fast. My gut is telling me to just keep the car loan and make two payments each month. I'd be afraid of Citi raising my APR on the $9,000 (almost all credit card agreements state they reserve the right to adjust the APR for ANY reason at ANY time)...that kinda scares me.
you can also do the monthly "balance incorrect" on efx with citi and they dont mind. Thus you can do the "the trick" and effectively your score would reflect a paid off car and $0 on your citi (your beacon). This could have huge effects on your credit score. Just gotta know the game, and play it ..
I think you would be safer paying double payments. You would save money on the intrest that you do not pay, and you would still have your CL available for other issues.
Re: Pay Off Car Loan With Credit Ca I recently paid off my 8.9 car loan by transferring the balance (it was small, about 3200) to Citibank at 4.9 for the life of the balance. I think this is a no-brainer. If you're paying 10.2 and you can transfer the balance to a card with a substantiallly lower rate or a -0- rate, you should do it. Don't worry about the credit score. Any impact will be temporary or at least partially offset by paying off the installment loan. I don't think you have to worry about your rate being jacked. If Citibank is offering you a fixed teaser rate, you will keep the rate for the agreed period as long as you pay on time.
Yeh, I tried two places so far. Cap One gave me 9.9%...whoopee!! And my local bank of 9 years said "No" due to a BK 8 years ago.
Re: Pay Off Car Loan With Credit Ca Well, as long as Citi won't jack my rate up, I'd be very tempted to do it. Maybe I could wait until the car loan balance drops a bit to around $5,000 and then do the BT. The one thing I forgot to mention is that my Citibank card has the "credit protection" insurance on it that will make the minimum payment for up to 12 months if I get laid off or am unable to work for some reason. The Honda loan does not have any insurance like that, so if I lose my job they're gonna want their payment each month regardless! That's definitely making me think about doing the BT to Citi!
Re: Pay Off Car Loan With Credit Ca Here is my case for not paying off a car with a credit card for a few point redux. I would consider refi or paying down the current loan before paying it off with a cc. Here's my logic: You say you have $800 to put toward the payment of the card. I'm presuming that includes the $338 that is your payment now. Keep the car loan, pay $800 per month toward the car. That way you pay it off in 12 months, with the last payment being about $570. (according to my math with the bankrate.com calculator adding 470 per month to the payment of 338--it also tells me that you have about 30 months left on the loan). That way in a year you will not only have the car paid off, but in the meanwhile you will have the $12,000 line of credit for whatever reason you may need it. I always lean towards keeping your credit line open. If you pay off your car with it, you will save some cash, no doubt, but in the meanwhile you lose the opportunities that the credit line affords. My reasoning is that cash and credit are both opportunity. If you pay the car off with a credit card you lower your opportunity from 12000 to 3000 grand. If you feel comfortable that you could get the same deal on another care, go for refi, you may save more than the couple of points the cc would save. 30ft.
Re: Pay Off Car Loan With Credit Ca if you lose your job and cant pay for the credit card they can't take the car, you could sell the car to your mom/dad/wife for $1 and default on the card.. you can't do that with your car payment...... if you were really bad boy you could bk7 on the credit card, and own the car (in someone elses name).. thats a very real option.
Re: Pay Off Car Loan With Credit Ca Thanks, that sounds like some pretty good advice. I've worked hard to pay my Citi card off and charging $9,000 to it right now sorta bothers me. I think sending $800 a month to Honda might be the best route to take. Like you said, that will pay the car off in a year, and leave my Citi card untouched with $12,000 of available credit Thanks again for everyone's advice...I appreciate it!
Re: Pay Off Car Loan With Credit Ca I would pay the car off using the card. Get the title. Also, add the employment/disability insurance. GOD FORBID you loose your job or become disabled. But, if you did, the insurance makes the payment for you. Bottom line: You save on interest, protect your transportation, and if you are unable to work, your payments are covered. My $0.02. CardKid
