topic Re: Went from 9.2 to 4.9 in Auto Loans

Went from 9.2 to 4.9

Anonymous — Sat, 17 May 2008 22:27:23 GMT

Yes yes! I went down by transfering to my CC @ 4.9. Got my car title in the mail and now I own my baby! haha. Anyone else transfer to a CC after a few months? ...

Re: Went from 9.2 to 4.9

Anonymous — Sat, 17 May 2008 23:09:53 GMT

I'm surprised the credit card company let you do it. Did you use a balance transfer check?

Great to get the APR down, but your FICO score will drop, but in the long run all the $$ you will save on interest will make it all worth it!

Congrats!

Re: Went from 9.2 to 4.9

Anonymous — Sat, 17 May 2008 23:17:23 GMT

@Anonymous wrote:
I'm surprised the credit card company let you do it. Did you use a balance transfer check?

Great to get the APR down, but your FICO score will drop, but in the long run all the $$ you will save on interest will make it all worth it!

Congrats!

Well...I doubt the score will drop over 10 points. It shows I paid off my car technically. The transfer also will die and I will transfer to another card.

Re: Went from 9.2 to 4.9

Anonymous — Mon, 19 May 2008 17:21:35 GMT

Paying off a car loan does virtually nothing to improve FICO score. On the otherhand moving the balance to your credit card will cause your util% to go up. What is your total balance (including transfering car loan) / total credit lines. Anything above 10% will hit your score. Anything above 50% and you can expect a large drop (50-100+ points depending on your current credit).

Did you CC company charge a balance transfer fee? How long is the 4.9 good for (for life of balance or only for 1 year)? If you util remains high you may find it difficult to transfer balance to another card as they will look at your util and see you as "over extended"? If that happens and you can't pay off balance in a year what rate does the % reset to?

While there is nothing wrong with doing this there are a couple gotchas and I think that is what 1111me was trying to point out?

Re: Went from 9.2 to 4.9

Anonymous — Mon, 19 May 2008 19:01:53 GMT

@Anonymous wrote:
Paying off a car loan does virtually nothing to improve FICO score. On the otherhand moving the balance to your credit card will cause your util% to go up. What is your total balance (including transfering car loan) / total credit lines. Anything above 10% will hit your score. Anything above 50% and you can expect a large drop (50-100+ points depending on your current credit).

Did you CC company charge a balance transfer fee? How long is the 4.9 good for (for life of balance or only for 1 year)? If you util remains high you may find it difficult to transfer balance to another card as they will look at your util and see you as "over extended"? If that happens and you can't pay off balance in a year what rate does the % reset to?

While there is nothing wrong with doing this there are a couple gotchas and I think that is what 1111me was trying to point out?

Right. I transferred all over the phone. I have 4.5 until February 09 THEN I might as well transfer to another card. Nothing happened with my FICO score yet..........

Re: Went from 9.2 to 4.9

MattH — Fri, 23 May 2008 19:28:47 GMT

@Anonymous wrote:
...Right. I transferred all over the phone. I have 4.5 until February 09 THEN I might as well transfer to another card. Nothing happened with my FICO score yet..........

Unless your credit card utilization was really low before you did this, your FICO score may drop significantly soon from this. Also, better not charge much in purchases on that card -- when a mix of rates apply to different portions of your balance, most CC companies will allocate payments so as to maximize their revenues, so you could be paying a LOT more interest than you think you will be paying. And make sure you pay at least as much every month as you would be paying had you not done the BT. Resist the temptation to make ends meet in a tight month by paying less on the loan occasionally.

The credit card company probably thinks you'll (1) take longer to pay off that balance than you think now that you no longer have the fear of the repo man making you stay current on car payments, (2) run up other balances on that card so they can stick it to you on the interest, and (3) find it much more difficult than you now think to BT again when the rate jumps. You must exercise significant self-discipline and prove them wrong!

Re: Went from 9.2 to 4.9

Anonymous — Sun, 25 May 2008 03:11:52 GMT

@MattH wrote:

@Anonymous wrote:
...Right. I transferred all over the phone. I have 4.5 until February 09 THEN I might as well transfer to another card. Nothing happened with my FICO score yet..........

Unless your credit card utilization was really low before you did this, your FICO score may drop significantly soon from this. Also, better not charge much in purchases on that card -- when a mix of rates apply to different portions of your balance, most CC companies will allocate payments so as to maximize their revenues, so you could be paying a LOT more interest than you think you will be paying. And make sure you pay at least as much every month as you would be paying had you not done the BT. Resist the temptation to make ends meet in a tight month by paying less on the loan occasionally.

The credit card company probably thinks you'll (1) take longer to pay off that balance than you think now that you no longer have the fear of the repo man making you stay current on car payments, (2) run up other balances on that card so they can stick it to you on the interest, and (3) find it much more difficult than you now think to BT again when the rate jumps. You must exercise significant self-discipline and prove them wrong!

Ah yes the update : The score dropped 32 pts. I, like I said expected something. I can bet I will get more offers from BofA on transferring this money around some more to lower, better rates. I also closed out a savings account I was being charged for never really using (under 99 dollar limit) .......

Re: Went from 9.2 to 4.9

Anonymous — Tue, 30 Sep 2008 13:39:22 GMT

I am in the process of doing this now. I looked at one of my chase accounts ($20k CL, 7K sitting in there at 0% until March 09) and saw that they had a BT offer of 3.99% until the balance is paid off. Today was the last day to respond to that offer, so I had to act quickly.

I bought a car for my wife in March and we've been paying 9.24% on it (also Chase). So I did a BT to a Citibank card with a $0 balance for $11.5K, just slightly higher than the payoff amount of the car, paying the transfer fee cap of $75. Once the transfer is complete, I will request a credit refund from Citi, deposit the check in the bank, and pay off the car.

If next month's BT offer is better, I can just pay off the balance and do another BT; however, I don't think it CAN be better, because I believe that as of October 1, the $75 cap is going away and the fee will be a straight 3% (or $345 on that $11.5K!)

Current car payments are at $240/mo (actually $235, but I've been paying $240), and my minimum payment of 2% will be $230, but I'll continue to pay $240, so monthly expenses should stay the same.

One of my other Citi cards has a BT offer of 0% until May 2009, so I'll use the same process to transfer the $7K already on the Chase card (as if I don't, my $240/mo will go towards the $7K balance, not the $11.5K). The Citi BT offer has a fee cap of $99.

After running some numbers, even with the $174 in transfer fees and if Chase charges me 12% APR on the $75 transfer fee (they tried to do that before but I complained so they dropped it!), I'll still save about $1600 AND pay off the car nearly a year earlier!

Of course, the downside is that it's gonna KILL my util, but we're not buying a house this year

Re: Went from 9.2 to 4.9

Anonymous — Tue, 30 Sep 2008 19:43:15 GMT

My only fear is that with my util temporarily over 90%, and then down to 55% on the one card, the resulting drop in my credit score could cause Chase or another credit issuer to panic and I'd end up with CLDs or rate hikes, but rate hikes would only matter in the two aforementioned cards, since I PIF all my other cards each month.

Re: Went from 9.2 to 4.9

Anonymous — Wed, 01 Oct 2008 04:26:16 GMT

Be concerned with the credit tightening.....any day now when a credit card you hold runs your credit and sees the high utility they can and most likely will drop your limits.

Right now this isn't a good idea by an means.....

Re: Went from 9.2 to 4.9

Anonymous — Thu, 02 Oct 2008 17:51:13 GMT

Well, here's what I'm doing. The Chase statement closes on October 22, which is when they report. I'm doing a BT directly from Citi to that Chase card, which I initiated yesterday. Citi says it will take 7-10 days to clear. Even if it's 7 to 10 BUSINESS days, it should clear before Chase reports, so instead of 7K/20K (35%), they will report 11.5K/20K (57.5%). Yes, it's a big jump, but they'll (hopefully) never end up reporting both balances together (92.5%).

Re: Went from 9.2 to 4.9

Anonymous — Thu, 02 Oct 2008 18:44:15 GMT

My current overall util is under 10%. After all the BTs, it will still be less than 23%.

Updated: Went from 9.2 to 3.9

Anonymous — Fri, 14 Nov 2008 21:48:57 GMT

When the card the balance was transferred to reported, my Equifax FICO suffered the tremendous drop of... 3 points.

I now own the car. Chase immediately closed the account, screwing up BofA's "My Portfolio" and Yodlee, and my Net Worth charts. Had I known they would have immediately closed it, I would have left a tiny balance. As it was I overpaid by $57.

I already got the refund for my overpayment, but I'm still waiting for the title. On the 5th, they said 5-7 days, so I should get it today!!