topic Re: Bought Used Car with Barclay Commence in Credit Cards

Bought Used Car with Barclay Commence

BluePoodle — Sat, 22 Apr 2017 00:57:54 GMT

DD just graduated from college. She has never owned her own car before and she is 22 years old. So we put in a request to up her CL on her Barclay Commence card since she was getting 18 month 0% offer checks from them. She bought a used car for $3,500 last week. She took out a total of $4k for the car, taxes, and some extras. So she was charged $120 for the 3% interest. It's not an expensive car but it is a great buy from another engineer that babied it for his daughter.

She just began her first job as an engineer. I am so excited for her and very proud of her. She should be able to have her student loans paid off in less than 2 years and her car paid off in about 16 months if she sticks to her budget.

Re: Bought Used Car with Barclay Commence

Anonymous — Sat, 22 Apr 2017 01:19:50 GMT

Thats a great way to use the card for sure. A heck of a lot cheaper than a used car loan!

Re: Bought Used Car with Barclay Commence

trant3 — Sat, 22 Apr 2017 01:26:19 GMT

Thats great use of their 0% BT checks. I'll be paying my students loans until.....forever

Re: Bought Used Car with Barclay Commence

BluePoodle — Sat, 22 Apr 2017 01:41:38 GMT

@Anonymous wrote:
Thats a great way to use the card for sure. A heck of a lot cheaper than a used car loan!

I thought of DCU but didn't see the point in opening another tradeline. The auto loan mix might have been a good thing for her credit score but she was already in the 760's so I didn't see the point. I figured in anther couple of years she can do whatever she likes to get a higher end car. Our focus right now was keeping the auto costs low to pay off her student loans ASAP.

Re: Bought Used Car with Barclay Commence

Anonymous — Sat, 22 Apr 2017 02:06:35 GMT

Not bad...
Just curious at 22 what other credit is/has she built...

Does she have installment account history
Auto loan history

The reason, I ask and it might be relevant for others to consider prior to copying this course

Rates are going up a bit right now, yes but they are still relatively low
When financing such small amounts for autos (think sub 5-6k) the 'cost' of credit is very low
Given the total financed and today's rates
Hence a 1.99-4.99 or even 6% over a 36 month loan isn't that expensive nor is there a big difference between 2% & 5% at that dollar amount and over that time span ( especially since the person most likely will over pay to rid themselves of the loan in say 24 months to mimic a CC BT)

Anyway, I say all that say the auto loan additional builds installment account history, as well as pads the profile with regard to auto loan history, which may come handy once the engineer wants to finance a 'real' car loan a few years down the road.

Her auto enhanced scores would benefit from having payment data vs none....

Noting the 3% transfer fee vs a modest % rate on a 24-36 auto loan isn't much of a difference at $3500 ( again especially considering the # in the finance box is only the amount you have IF you service the loan the entire period...It is conceivable that one could establish the auto loan and pay it within a time frame to pretty much equal the $120 in % again seeing the amount is only $3500 total)

I made to same type calculation when my, now 21y.o., got his car last year the amount is so low that even taking a 36 month loan the cost of % is relatively low in comparison to the $120 BT fee which effectively is an 18 month payoff either way IF the loan us retired in 18 months the cost difference is minimal if at all but one way builds credit mix and massages auto loan history.

Again, it may not be useful to some but others might appreciate the different perspective of how to basically get to the same it very similar spot and do the young person's credit profile a favor

And a cushion as a few more months to pay with a more manageable monthly might be worth say another $60 bucks in % to divide that nut into 24-30 vs 18

Again, not for everyone but the cost a analysis could absolutely pay off with an enhanced or preferred auto loan on the Next auto due to have the history on file.

Re: Bought Used Car with Barclay Commence

CreditCuriosity — Sat, 22 Apr 2017 02:28:38 GMT

I will die with my SL's... No one they can collect from, other than I guess my estate before iit goes to whomever is in line first and still alive. I have no desire to pay down at 3.x percent loan in a fast amount of time.. I f I wanted to buckle down for 2 years could pay it off, but meh as stated why at such a good rate

Re: Bought Used Car with Barclay Commence

BluePoodle — Sat, 22 Apr 2017 02:46:27 GMT

@Anonymous wrote:
Not bad...
Just curious at 22 what other credit is/has she built...

Does she have installment account history
Auto loan history

The reason, I ask and it might be relevant for others to consider prior to copying this course

Rates are going up a bit right now, yes but they are still relatively low
When financing such small amounts for autos (think sub 5-6k) the 'cost' of credit is very low
Given the total financed and today's rates
Hence a 1.99-4.99 or even 6% over a 36 month loan isn't that expensive nor is there a big difference between 2% & 5% at that dollar amount and over that time span ( especially since the person most likely will over pay to rid themselves of the loan in say 24 months to mimic a CC BT)

Anyway, I say all that say the auto loan additional builds installment account history, as well as pads the profile with regard to auto loan history, which may come handy once the engineer wants to finance a 'real' car loan a few years down the road.

Her auto enhanced scores would benefit from having payment data vs none....

Noting the 3% transfer fee vs a modest % rate on a 24-36 auto loan isn't much of a difference at $3500 ( again especially considering the # in the finance box is only the amount you have IF you service the loan the entire period...It is conceivable that one could establish the auto loan and pay it within a time frame to pretty much equal the $120 in % again seeing the amount is only $3500 total)

I made to same type calculation when my, now 21y.o., got his car last year the amount is so low that even taking a 36 month loan the cost of % is relatively low in comparison to the $120 BT fee which effectively is an 18 month payoff either way IF the loan us retired in 18 months the cost difference is minimal if at all but one way builds credit mix and massages auto loan history.

Again, it may not be useful to some but others might appreciate the different perspective of how to basically get to the same it very similar spot and do the young person's credit profile a favor

And a cushion as a few more months to pay with a more manageable monthly might be worth say another $60 bucks in % to divide that nut into 24-30 vs 18

Again, not for everyone but the cost a analysis could absolutely pay off with an enhanced or preferred auto loan on the Next auto due to have the history on file.

She had not consolidated her student loans. So she has one for each semester of college (8) plus one from her college for a total of 9. Student loans are installment loans and the oldest was opened in 2012 when she began college. They total just under $30K. She also has 3 CC's of her own. The first was her Barclay (originally Sallie Mae) that she just bought her car with. She also has an Amex BCE and and Chase Freedom. I have previously had her on a few of my CC's as AU which would be reporting even though she is no longer an AU. I kept her as an AU on my Amex ED in case of emergiencies since it is my highest CL card. I also have her on my Chase Disney as an AU basically because we get park perks and visit Disney often.

My last two cars I owned never had an auto loan. I had no problem getting an auto loan in Feb 2016 with DCU. I know the auto enhanced score is a benefit buying from a dealer but I don't think it makes much of a huge difference when you already have a decent score to begin with. We found a car from an individual and this I felt was our simiplist option without a lot of hassle. I know others might have gone another route but it worked well for us.

Re: Bought Used Car with Barclay Commence

BluePoodle — Sat, 22 Apr 2017 02:53:54 GMT

@CreditCuriousity wrote:
I will die with my SL's... No one they can collect from, other than I guess my estate before iit goes to whomever is in line first and still alive. I have no desire to pay down at 3.x percent loan in a fast amount of time.. I f I wanted to buckle down for 2 years could pay it off, but meh as stated why at such a good rate

They die with you. No one is responsible for SL's unless they are private loans that someone else co-signed for. That being said, I agree that if you have other things to do with your cash then paying off 3% loans is not really a priority. But she is also putting away $ in savings. Most of her student loans are also 3 to 3.5%. She does have one that is 4% and I think another close to 6%. We are going to pay off smallest first and use snowball effect and not worry about % so much.

I expect her to get married in the next year and I know they are talking about buying a house so haveing less in loans gives them a larger budget for mortgage if they want to do that.

Re: Bought Used Car with Barclay Commence

Anonymous — Sat, 22 Apr 2017 04:47:59 GMT

@BluePoodle wrote:
@CreditCuriousity wrote:
I will die with my SL's... No one they can collect from, other than I guess my estate before iit goes to whomever is in line first and still alive. I have no desire to pay down at 3.x percent loan in a fast amount of time.. I f I wanted to buckle down for 2 years could pay it off, but meh as stated why at such a good rate
They die with you. No one is responsible for SL's unless they are private loans that someone else co-signed for. That being said, I agree that if you have other things to do with your cash then paying off 3% loans is not really a priority. But she is also putting away $ in savings. Most of her student loans are also 3 to 3.5%. She does have one that is 4% and I think another close to 6%. We are going to pay off smallest first and use snowball effect and not worry about % so much.

I expect her to get married in the next year and I know they are talking about buying a house so haveing less in loans gives them a larger budget for mortgage if they want to do that.

Actually, although I wish that was the case for all states in the US, I don't think it is. For example, community property states, a spouse is responsible equally or equitablly for debts even if they are not cosigned or attached in any way, afaik...

http://www.creditcards.com/credit-card-news/map-community-property-laws-by-state-1282.php

also:

"But in addition, debts incurred by you or your spouse during your marriage (regardless of whose name is on it) are generally deemed to be community debts and both spouses are considered equally liable. This means that even if the credit card debt was incurred by your spouse alone, you may be on the hook for it. However, keep in mind that debts incurred by your spouse prior to marriage or after separation or divorce are not community debts.

Also, each state weighs different factors and may have additional rules regarding when an obligation is considered a community debt. Usually, if the debt was incurred for something that benefited your marriage, it will likely be deemed a community debt. But if it was a purchase that only benefited your spouse, there is a greater likelihood that it will not be considered a community debt.

Currently, the following states follow community property rules: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. In Alaska, married couples can agree to treat their property as community property."

I will say that since this post borders on credit scoring, and as someone with multiple student loans still reporting, I had a decent boost (15-30+ points dont remember) from adding a new installment loan last summer. I don't have car loans on my reports anymore either.

As far as I can see its fine...sounds like she has enough accounts to not ding her for total utilization. I've done it, but never more than 30-40 util on a card for a car, and went in with a plan, which you have...Her utilization will heal if it you do see a dip..but at that age it is making me wonder. I would hope at her age that the car purchase didn't go over half of her limit. Hoping it didn't max out the card. If it did, so be it, but its with barclays, a box of chocolates....

Regarding the repayment of the student loans, when you say we, do you mean her paying, but really its your plan? If you mean mutual paying or you... Save your money. Put it in a high yield checking account. Help them out with home searching and maybe the downpayment. She is, afterall, an engineer, and surely will be able to handle paying them on her own, with your great plan. Easy and simple always wins the race with student loans if you can stick to it. Kudos for not caving in to consolidating!

Re: Bought Used Car with Barclay Commence

Anonymous — Sat, 22 Apr 2017 05:53:37 GMT

Congrats on your daughter graduating from college, starting her first job, and purchasing her first car!!! I how you roll!!!

And she's only paying $120 to finance it. Good job Mom!

Re: Bought Used Car with Barclay Commence

Credit_hawk — Sat, 22 Apr 2017 05:58:44 GMT

Hey, just curious, you guys talking about all your student loan debt: Did you guys go to grad school or is your debt just from your bachelors?

Re: Bought Used Car with Barclay Commence

BluePoodle — Sat, 22 Apr 2017 15:21:13 GMT

@Anonymous wrote:
@BluePoodle wrote:
@CreditCuriousity wrote:
I will die with my SL's... No one they can collect from, other than I guess my estate before iit goes to whomever is in line first and still alive. I have no desire to pay down at 3.x percent loan in a fast amount of time.. I f I wanted to buckle down for 2 years could pay it off, but meh as stated why at such a good rate
They die with you. No one is responsible for SL's unless they are private loans that someone else co-signed for. That being said, I agree that if you have other things to do with your cash then paying off 3% loans is not really a priority. But she is also putting away $ in savings. Most of her student loans are also 3 to 3.5%. She does have one that is 4% and I think another close to 6%. We are going to pay off smallest first and use snowball effect and not worry about % so much.

I expect her to get married in the next year and I know they are talking about buying a house so haveing less in loans gives them a larger budget for mortgage if they want to do that.
Actually, although I wish that was the case for all states in the US, I don't think it is. For example, community property states, a spouse is responsible equally or equitablly for debts even if they are not cosigned or attached in any way, afaik...

http://www.creditcards.com/credit-card-news/map-community-property-laws-by-state-1282.php

also:
"But in addition, debts incurred by you or your spouse during your marriage (regardless of whose name is on it) are generally deemed to be community debts and both spouses are considered equally liable. This means that even if the credit card debt was incurred by your spouse alone, you may be on the hook for it. However, keep in mind that debts incurred by your spouse prior to marriage or after separation or divorce are not community debts.
Also, each state weighs different factors and may have additional rules regarding when an obligation is considered a community debt. Usually, if the debt was incurred for something that benefited your marriage, it will likely be deemed a community debt. But if it was a purchase that only benefited your spouse, there is a greater likelihood that it will not be considered a community debt.
Currently, the following states follow community property rules: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. In Alaska, married couples can agree to treat their property as community property."

I will say that since this post borders on credit scoring, and as someone with multiple student loans still reporting, I had a decent boost (15-30+ points dont remember) from adding a new installment loan last summer. I don't have car loans on my reports anymore either.

As far as I can see its fine...sounds like she has enough accounts to not ding her for total utilization. I've done it, but never more than 30-40 util on a card for a car, and went in with a plan, which you have...Her utilization will heal if it you do see a dip..but at that age it is making me wonder. I would hope at her age that the car purchase didn't go over half of her limit. Hoping it didn't max out the card. If it did, so be it, but its with barclays, a box of chocolates....

Regarding the repayment of the student loans, when you say we, do you mean her paying, but really its your plan? If you mean mutual paying or you... Save your money. Put it in a high yield checking account. Help them out with home searching and maybe the downpayment. She is, afterall, an engineer, and surely will be able to handle paying them on her own, with your great plan. Easy and simple always wins the race with student loans if you can stick to it. Kudos for not caving in to consolidating!

All of her student loans are Federal, which would be discharged at the time of the borrowers death. I realize other types of loans may not be the case. And they might also depend on if the loan was taken out when the borrower was married too as well a state of residency.

Her Barclay CL is $6,200 so she is over 50% and it will be interesting to see how it effects her score. But it will be short term.

The payment plan for her Student loans or any debt is her plan....after 4 years of college of me suggesting that her first year out she live at home and work to pay off as much as possible in her debt before she moves out on her own. Since she and i are very close and she actually loves being at home after over four years of living in another state than me while at college, she doesn't have a problem with it.

I have no intention of paying on her student loans it is her debt and I have paid more than my share of her education throughout her life since she has always attended private school even for college. This is her bill and she has a plan to pay it with a career that will afford her to do so. Just as the car is now her debt and she will be paying for it.

There may be better ways of paying if off slowly and investing, etc but those are not our ways. The debt is relatively small compared to many who graduate from college, only $29K. For an engineering degree that is small and she only has an under grad. She may decide to go to grad school as some point and having her student loan paid off would be nice if she decides to do so.

Re: Bought Used Car with Barclay Commence

BluePoodle — Sat, 22 Apr 2017 15:39:37 GMT

@Credit_hawk wrote:
Hey, just curious, you guys talking about all your student loan debt: Did you guys go to grad school or is your debt just from your bachelors?

The student loan debt I am referring to for my DD is Federal funded loans for her undergraduate degree.

I self paid for my own masters and did it without taking out loans but also had scholarships to reduce my education. Since I was in school I did defer my undergraduate fed loans.