transfer high-interest private student loan to permanent low-interest credit card?

[niecey89]

Kudoes on the last 2 post.

[Anonymous]

Thank you for all of your replies and careful considerations.  Just for your information, I did just call my credit card company and they said if I put $9000 on their card, it wouldn't trigger any negative reactions or financial reviews, as they check their accounts every month anyways, and I'm in good standing.  That does make sense that my credit score would go down as the debt would go into a revolving utility.  But since I'll save $2000 in interest and be able to pay off that high interest student loan three years earlier if I do this, I think I will go ahead with my plan.  However, feel free to send me any additional warnings over the next couple of days in case there's something else I haven't thought of.  My APR won't change over the life of the purchase, and I have no other higher APR purchases that need paying off.  I feel like I'm willing to take the FICO hit to save money and be debt-free sooner. 

[niecey89]

good luck

[Anonymous]

$ trumps FICO-

Yes you WILL take a FICO hit-

10 to 15 points per 10% of overall UTL and anohter 10 to 20 points if you do not have an open installment account/

You you have decent scores and are not going to be making a major purchase soon (car or house) then the heck with a short term FICO hit-

[Anonymous]

I agree: do it to save the $ (or to prevent default) and take the FICO hit; it may be less than you think.

I recently transferred $11.5K at 3.99% for the life of the transfer to a card with a $20K CL to pay off an auto loan at 9.24%.  When the card reported, I only lost 3 points on my Equifax FICO (the only one I have access to currently, and I still have another auto loan so credit mix was minimally affected).

I want to do something like this to clean up my wife's defaulted loans, but then I'm making HER debt into MY debt, as she has very little revolving credit, which I would prefer to avoid, if possible.

Message Edited by Mike14 on 11-04-2008 01:44 PM

[Anonymous]

I wonder if you could pay off your SL with a transfer (or by your bank account that had a transfer) then down the road declear BK? It would be a creative way to circumvent the no BK, SL theory? Unless the BK would not allow it?

[Anonymous]

A few words of caution: 

promotional checks at 2.9% interest.  My CC with MBNA sent out these promotional checks all the time.  Deep in the fine print it stated that the teaser rate was only valid for 6 months.  Make sure your rate is for a longer term.  Also never use the CC for anything else.  Your payments go towards the lower interest rate items first.  So if you charge $100 for something, that 100 will be running at 19% or whatever higher rate you have for as long as your 9k is outstanding. 

I also wonder if you included in your calculations the federal income tax credit for student loan interest.  My wife and I get a $2k credit for interest on our loans.

[Anonymous]

One other thing to keep in mind:  Credit card companies can change the terms any time they want.  Chase will be doing this starting in January to some customers who have had a low-interest life-of-loan rate on a balance for, it seems, longer than 2 years.  

In addition to a $10 monthly service charge, the minimum payment will go from 2% of the balance to 5%!  So your $9K loan's minimum amount due would go from $180 to $450.  They can't change your interest rate, but they can change other things!

Luckily, I just transfered my $11K car loan to a CC about a month ago, so I should be able to avoid this, for now.

Message Edited by Mike14 on 11-26-2008 08:57 PM