Car Loan v Credit Card

[loukkcat]

I want to get a car loan for €4,000. I have never got a personal/ car loan before.

When I rang AIB (who I do all my banking with) I was quoted an interest rate of 13% over 18 months, which seems really high. My credit card has a limit of €10k and an interest rate of 11.84%, so would I not be better buying the car with my credit card and paying it back over the 18 months (hopefully quicker)....

With the 13% interest (loan), I would be paying back €260.86 every month, and a total payment of €4,434.62. If I pay back around €300 a month on the credit card, would I end up paying less overall?

Thanks!!

 

[Chris]

With most credit cards you will be paying interest on the full original amount until it is paid off comlpetely. May still work out cheaper but you'll have to do the math.

 

[csl]

Loukcat - if you are a member of a credit union you should be able to get a rate of 6.9% Special Car Loan rate or even 9% if they are not running that promotion. They calculate the interest on a reducing balance. Well worth a phonecall to your local credit union.

 

[Sidetracker]

I would have thought that you would be paying "Compound Interest" on a Card. I think a personal loan or, as has been suggested already, open a Credit Union Account. It would also be good for saving.