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Super Contributor
Posts: 5,759
Registered: ‎01-28-2008
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Xferring Installment Loan to 0% APR Citi Card

After much thought,  I have to take advantage of my 9 months 0% APR Citi card offer. There's a lot of naysayers on this board that will say bad idea, but this time I have to trust my instinct and experience.

 

My pay off amount is $5,194.75 until 10/16.   After 10/16 I will have to add $1.54 per day to the balance.  My loan is scheduled to be paid off 10/2010.  I have 10 payments left.   I will take $2,194 from savings, and xfer the remaining $3000 to Citi.  If I go ahead with the BT would save $632.35- $90 BT fee= $542.35 in savings.

 

I currently have $24,100 in available credit.  I have no credit card balances.  Xferring $3000 will put me at 12.45% utilization.   The BT balance will be paid off before the teaser rate ends. 

 

I don't see this as being a bad idea.  Any input is greatly appreciated.  

Moderator Emerita
Posts: 28,098
Registered: ‎04-01-2007
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Re: Xferring Installment Loan to 0% APR Citi Card

I'm not running the numbers, lol, but I would say that although generally it's not smart to transfer secured debt (auto loan) to unsecured debt (CC), if you know, really know, that you're not going to screw it up, and you will pay it off in time, I don't see a problem with it.

We've had plenty of members who moved a car loan to a 0% BT and did fine.

The trick is that you (not you specifically, DI, just anyone contemplating this) needs to be absolutely secure in the knowledge that the debt will indeed be paid off in the time period. And it's good to have at least three months' worth of that payoff amount --not just the minimum payment, but the amount that you plan to pay monthly --set aside to cover the payments if you get furloughed at work or something. And finally, you need to know the exact terms of the BT --if you can't pay it off in that time period, will you owe interest on the entire amount transferred, or just on the balance that was still owed when the promotional period ran out?

The people who do NOT need to think about doing this are those who are shaky in their financial management; who keep finding themselves caught by surprise and hurting when conditions change; who don't have a good solid pad of savings. For those in that situation, be smart, be conservative, and do things the old-fashioned way. If several years go by, and you find that your management of your money and your credit have changed so that you effortlessly make smart decisions, then you might consider something like this.
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Super Contributor
Posts: 5,703
Registered: ‎10-06-2007
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Re: Xferring Installment Loan to 0% APR Citi Card

I would do it as long as you are 1000% certain you can PIF before the BT term ends and your Ctit card is 0 balance.  I would also try not to let any other CC report a balance to minimize any idea of Citi to do AA on you.

 

I would also pay as much as I could as soon as I could.  Also sock drawer the Citi card until the BT is PIF.

 

 

 

 

11/28/2014 FICO: EQ: 796 EX:788 TU:803
Super Contributor
Posts: 5,759
Registered: ‎01-28-2008
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Re: Xferring Installment Loan to 0% APR Citi Card

[ Edited ]

Thanks for the replies.  

 

I did this before with my State Farm card.  I had a 0% APR for 12 months and $0 BT fee.   I divided the total BT amount by 12 and made 12 equal payments. Never late!!  I didn't use the card at all during the 12 months.  I know credit card rules.  I am very dicipline.  I will have the BT paid off by 5/2010 rather than take the full 9 months. 

Message Edited by DI on 10-12-2009 04:59 PM
Established Contributor
Posts: 760
Registered: ‎04-30-2007
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Re: Xferring Installment Loan to 0% APR Citi Card

It sounds like you have it all planned out and under control, so I think it's a good plan. Any time you can save some decent coin, it's worth it.
pattycake's FICOs: 6/2/10 - TU: 708; EX: ???; EQ: 749
Super Contributor
Posts: 5,759
Registered: ‎01-28-2008
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Re: Xferring Installment Loan to 0% APR Citi Card

I'm going to go through with it pending what creditwherecreditisdue saysSmiley Happy 
Moderator Emerita
Posts: 28,098
Registered: ‎04-01-2007
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Re: Xferring Installment Loan to 0% APR Citi Card


DI wrote:
I'm going to go through with it pending what creditwherecreditisdue saysSmiley Happy 

Smiley Very Happy
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Regular Contributor
Posts: 193
Registered: ‎07-13-2008
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Re: Xferring Installment Loan to 0% APR Citi Card

We're waiting............

 

CI

Established Contributor
Posts: 645
Registered: ‎10-24-2007
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Re: Xferring Installment Loan to 0% APR Citi Card

[ Edited ]

I did this earlier this year with the remaining 24 payments I had left on my car loan. I don't remember at the moment how much I saved but it was about $1000, I believe. It has worked out fine for me even though I put a much larger amount on the 0% cards.

 

It sounds like you have a well thought out plan and Hauling has given a lot of good advice above.

 

I say, Trust yourself and  "Go for it!" 

 

 It's all about saving money!

Message Edited by VEEnVEGAS on 10-12-2009 09:01 PM
Senior Contributor
Posts: 4,923
Registered: ‎04-19-2009
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Re: Xferring Installment Loan to 0% APR Citi Card

I already answered your question last night. The calculation in that thread overstated the finance charges you will actually save by making the BT. (I am not going into the details of how or why the saving are overstated, but they are. It is not worth the effort to do a technically correct recalc when the back of the envelope one shows < $100 savings.) Prepaying the loan out of your savings is OK if you really want to. Making the BT is unnecessary and unwise. Don't move debt from secured installment to unsecured revolving - that's very bad business.
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