topic Re: Pay NFCU with NavChek ?? in Credit Cards

Pay NFCU with NavChek ??

jaxstraw — Sun, 03 Aug 2008 11:46:38 GMT

DW threw a question at me last night and I'm a little stumped.

The only CC we have a balance on is NFCU Plat , it's at 12600. This is our wedding and honeymoon charges. I'm going to pay it off over the next 3-4 months. Right now it is at 10.9% interest and the minimum is $253 roughly.

I make good income but being a self employed cabinetmaker/woodworker you never really know if the bottom can drop out at any time.

She asked if I pay the full balance with NavChek , although it's at 12.5% interest, wouldn't the minimums be significantly lower in case something happened (like work drying up). We have a small LOC (2k) with our local credit union and they only want a minimum of $25 on any draw on the LOC.

I tried telling her that if you 'borrow' 12600 they are going to want more than 25 bucks a month back.

I'll never do it since I'm planning on paying it quickly anyway but what would the minimum be if I did. I'd love to just tell her it's a bad deal but I don't really have an answer.

Jax

Re: Pay NFCU with NavChek ??

Anonymous — Sun, 03 Aug 2008 15:38:16 GMT

Hey Jax,

The great thing about NAVChek is that you can repay it

either as a Line of Credit (LOC) or as an installment loan.

If memory serves me correctly, the LOC option requires

a minimum of 2% of the balance or $20, whichever is higher.

The only downside is that your util will be at 100% if you use

the entire amount, but as long as your utility on other credit is

low or near zero, this shouldn't be a problem FICO-score wise.

If you choose to repay with fixed monthly amounts, NAVChek

will convert to an installment loan and be reported as such.

I'd double check with Navy Fed to get exact numbes, but this is how

the options were explained to me.

Hope this helps. Please keep us posted on what you decide to do.

Enjoy the weekend!

Edit to add: It's ok to use loan proceeds or one LOC to pay off another.

As long as payments are early or on time, Navy Fed is fine with it.

When I got approved for my Signature Loan I used part of it to pay off

my CC's so I could preserve my cashflow. So it's no problem whatsoever....

CanDo

"The right attitude is everything"

Message Edited by CanDoAttitude on 08-03-2008 08:32 AM

Message Edited by CanDoAttitude on 08-03-2008 08:38 AM

Re: Pay NFCU with NavChek ??

jaxstraw — Sun, 03 Aug 2008 16:13:06 GMT

If you run the numbers , $12600 bal at 2% comes out to be approx $250. The same as the minimum on the CC.

The only difference would be a higher interest rate and that it could report as an installment.

At least I can explain that to her and show her the difference.

Thanks CDA, very helpful.

Jax

Re: Pay NFCU with NavChek ??

Anonymous — Sun, 03 Aug 2008 16:53:19 GMT

You're welcome, Jax. I'm glad my input was helpful.

Just out of curiosity I went to Navy Fed's website and crunched

some numbers on their calculator.

If you converted your NAVChek to an installment loan, you have up

to 5 years to repay the loan. Payments on $12,600 @ 12.5% for

60 months works out to $285.91, which is actually higher than the

$250 you quoted as an LOC payment. BUT....NAVChek would report

as an installment loan and you could make the first 2-3 monthly payments

and then pay off the rest (no prepayment penalty). Once your NAVChek

balance reaches zero, it goes back to being reported as an LOC (just like a credit card).

So if you have 10 CC's, NAVChek (LOC) and a Sig Loan, in essence you have 11

revolving lines of credit and 1 installment loan. But if you convert NAVChek to an

installment loan you'd have 10 lines of credit and 2 installment loans. As long as

your FICO scores remain in the high 600's to low 700's you'll be fine...

Hope this helps you, Jax. Enjoy the day!

CanDo

"The right attitude is everything"

Message Edited by CanDoAttitude on 08-03-2008 09:51 AM

Message Edited by CanDoAttitude on 08-03-2008 09:53 AM