Credit Cards

[Meltdownblitz]

I was planning on making a somewhat big purchase that for once I would probably need a few months to pay off. Would it be better to go with a shared secured loan to pay off the purchase or leave the balance on a 0% apr cc that I would have to apply for and take a few months to pay off?

Any opinions appreciated. Thanks.

[LS2982]

---

Meltdownblitz wrote:
I was planning on making a somewhat big purchase that for once I would probably need a few months to pay off. Would it be better to go with a shared secured loan to pay off the purchase or leave the balance on a 0% apr cc that I would have to apply for and take a few months to pay off?

Any opinions appreciated. Thanks.

---

I would do the 0% CC. When you say secured loan are you putting all of the money for the loan in?

[Meltdownblitz]

Shared secured loan meaning using the same amount of my money i want to borrow as a collateral and making payments on it, as I make payments that amount of my funds becomes available.

[LS2982]

---

Meltdownblitz wrote:
Shared secured loan meaning using the same amount of my money i want to borrow as a collateral and making payments on it, as I make payments that amount of my funds becomes available.

---

Never heard of that before, that pretty neat. I would go with that, who offers that?

[webhopper]

If your credit history is lacking in installment account history; I would do the shares loan... or even a CD secured loan. You may also look at a short term 401k loan as the interest gets paid back to you.

[Meltdownblitz]

LS, as far as I know all credit unions. However the trick to do that is you have to have the money, hint the word "secured". However there is a small interest rate, usually under 3%. I believe they are not allowed to charge over 2-3% because it is a secured loan by the money you already have in the bank. I feel that this looks better to a lender checking your credit then carrying a balance on a credit card because its showing them you already have the money. In my opinion, when you carry a balance on a cc it's showing you are unable to pay it.

[myjourney]

They're actually great B/C banks supply them and report the positive history to credit agencies and it show as an installment loan.

I used one to boost my scores

[navigatethis12]

I don't understand how the loan is any different than actually paying for it outright. You said you give them the money as collateral, meaning that you don't have it anymore, yeah?

Also, lenders won't know that you are carrying a balance on a credit card, unless they actually look into the payment and balance history of the account, and they rarely do that. Taking a few months to pay off a card is not a big deal and I doubt any lender would look down on someone for doing such a thing.

[myjourney]

You can also do it with a CD

certificate of deposit and they pay interest on your deposit for the term of the loan. not much interest but non the least interest

[Revelate]

---

navigatethis12 wrote:

I don't understand how the loan is any different than actually paying for it outright. You said you give them the money as collateral, meaning that you don't have it anymore, yeah?

Also, lenders won't know that you are carrying a balance on a credit card, unless they actually look into the payment and balance history of the account, and they rarely do that. Taking a few months to pay off a card is not a big deal and I doubt any lender would look down on someone for doing such a thing.

---

You just can't access it; it's still yours.  Plus it does show up as an installment tradeline on one's credit reports; if one's report is lacking in installment history, I agree with the other posters it's a great solution.  Also as someone stated, some lenders (not all) allow you to secure it against a CD or other interest-bearing account.  In my case I financed $2500 at an effective APR of 2% with USAA.

LS: Virtually every bank that still offers personal loans (Chase and BOFA are notable exceptions in that they don't) can and will often gladly do a secured personal loan.