Is transferring a car loan to a credit card the right move?

[Qacer]

I keep receiving credit card offers for APR of 3.99% if I do a balance transfer. That got me wondering. My car loan is at 5.70%, and I have about $13k left. I was thinking that I can eliminate about $400 of fixed payment per month if I transfer the remaining balance to a credit card and just make minimum payments until all my other bills are paid.

I've evaluated some scenarios, and so far, I don't really see anything wrong with it as long as the credit card APR is fixed for the life of the balance. I know Suze Orman is against credit card debts, but switching to a lower interest rate seems reasonable.

Any other perspective?

 

[RichardE]

If you miss or are late by one payment is your CC going to go up to 19%?

 

[ElFenix]

Originally posted by: RichardE
If you miss or are late by one payment is your CC going to go up to 19%?

no, it's going to go up to 29%.

 

[Kelvrick]

Originally posted by: ElFenix

Originally posted by: RichardE
If you miss or are late by one payment is your CC going to go up to 19%?

no, it's going to go up to 29%.

Automatic monthly minimum payments are good for stuff like that.

Otherwise, OP has to figure out if they're going to charge the standard 3% fee. 400 bucks isn't much though.

 

[shortylickens]

As a general rule putting ANYTHING on a card is a bad idea.
But I will say that if you feel like you are getting totally screwed on your car loan and you believe you can handle the payments on your card, go for it.

CC companies are much more forgiving with late, missed or short payments than the average auto place.

 

[Qacer]

Hmm.. I never thought about late payments. I've never had any late payments, but I'm sure I can just use automatic bill payments to make sure that I pay on time. However, I read my credit card offer again, and it seems like they change the terms on this new letter. It used to be 3.99% for the life of the balance, but now, they're only doing up to 12 months. Bummer.

Assuming that I do get 3.99% for the life of the loan and a minimum payment of 2.75% of the loan, then I'm going to be paying less than $200 a month after 2 years and I'll pay about $1700 on total interests. But then if I continue with my car loan, I'm only going to be paying another $1307 on interest until the loan is paid off. I guess I'll stick with the car loan.

 

[spidey07]

Originally posted by: Qacer
Hmm.. I never thought about late payments. I've never had any late payments, but I'm sure I can just use automatic bill payments to make sure that I pay on time. However, I read my credit card offer again, and it seems like they change the terms on this new letter. It used to be 3.99% for the life of the balance, but now, they're only doing up to 12 months. Bummer.

Assuming that I do get 3.99% for the life of the loan and a minimum payment of 2.75% of the loan, then I'm going to be paying less than $200 a month after 2 years and I'll pay about $1700 on total interests. But then if I continue with my car loan, I'm only going to be paying another $1307 on interest until the loan is paid off. I guess I'll stick with the car loan.

Cheers to you on reading the fine print. In that fine print there is likely a clause regarding changing your interest rate if you sneeze at the wrong time.

This is the high risk you are facing vs. the car loan. Your car loan rate can't change, the CC balance can, to as much as 29%. It's in the fine print. Plus any balance transfer fees.

 

[onlyCOpunk]

No. Because your car loan payments are planned out for you at x price every month. If you put it on a CC, it's just going to keep acrueing more and more interest every month you don't pay it off.