Using credit card instead of Loan

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oreilly21

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Hi

i currently have a personal loan to pay off my car. we are now thinking of upgrading our car to a new model in january. it will cost us 5500 to swap old car for new car. we could extend our current loan to 17k over 4 years or we could put the 5500 on our credit card and try to pay it off over 4 months or so. is this method completely mad or does it make sense?

it will mean we we own our new car in 2 more years as opposed to 4 years but it will also mean sqeaky bum time for the 4 months we are trying to clear the credit card.

any advice would be great on this guys!!
thanks
 
Personally - think borrowing at credit cards rates is absolutely daft...

From reading your post, it would appear you proposed to pay off E5.5k in 4 months (neat trick, but if you can afford to do that - great), here's what I'd suggest...

Approach you bank, credit union or current car loan provider, tell them what you are thinking of doing, and seek a E5.5k loan (say over six months) at personal loan rate rather than credit card rates - then in 4 or 6 months time you'll have the new loan paid off, and will only have the original loan to pay off in the original time frame (which looks like two years from your post).

Best of luck....
 
Credit cards were never designed for buying cars. No car dealer will accept a credit card for buying a car, so you would have to resort to withdrawing in cash. The high interest rates associated with cash transactions (some cases in excess of 24%) does not seem to me to be a good idea.
 
Blackberry said:
Credit cards were never designed for buying cars. No car dealer will accept a credit card for buying a car, so you would have to resort to withdrawing in cash. The high interest rates associated with cash transactions (some cases in excess of 24%) does not seem to me to be a good idea.
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I would not advocate using a credit card for such a purchase, but ..

The major card companies generally charge a cash withdrawal fee of around 2%, after which the withdrawal is subject to interest same as any other CC purchase. Not sure where 24% come from, unless you mean an APR over a full 12 months. But since the OP is not considering 12 months .. :confused:

And I doubt you'd be given EUR 5500 cash on your CC.
 
Why not save the 5500 over four months instead, IMO not a good idea to put that amount on a credit card, too easy to get into debt with CC's.
 
TarfHead said:
Not sure where 24% come from, unless you mean an APR over a full 12 months. But since the OP is not considering 12 months .. :confused:

And I doubt you'd be given EUR 5500 cash on your CC.
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Sorry for the confusion, I do mean an APR rate of 24% over the course of a year.
 
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