Buying a car with a credit card
3rd Gear
Joined: Dec 2002
Posts: 177
Likes: 0
From: Jenkintown, PA
Originally Posted by bobdobbs
With all the talk of leasing vs. buying, something else came to mind. The other day I got some of those "convenience checks" for my VISA card. I never use this particular card, preferring to use my Amex, so it has no balance and a $24,000 credit limit.
One of the checks is 3.9% annual APR, until the amount is paid off. Suddenly, I thought, why not buy my upcoming MCS with one of these checks? I realize there's a gotcha: that if you're late on a payment, it automatically jumps to some ridiculous double-digit rate, but assuming that doesn't happen, what's the downside? Is it that CC interest is compounded?
One of the checks is 3.9% annual APR, until the amount is paid off. Suddenly, I thought, why not buy my upcoming MCS with one of these checks? I realize there's a gotcha: that if you're late on a payment, it automatically jumps to some ridiculous double-digit rate, but assuming that doesn't happen, what's the downside? Is it that CC interest is compounded?
6th Gear
Joined: May 2005
Posts: 15,478
Likes: 2
Originally Posted by MJO MINI
And don't underestimate what this does to your credit score.
Depending upon how many other cards and their total maximum credit limit, it may do NOTHING to his credit score.
FICO looks at the total outstanding debt/maximum credit limit.
If he has enuff maximum credit, it may do nothing. If he as NO other cards, then yes, his FICO score may go down.
2nd Gear
Joined: Nov 2005
Posts: 70
Likes: 0
From: Whittier, CA
Chows4us, I hear you, and I think you may be oversimplifying how FICO works. It is much more complex than that. Bottom line is neither of us are in a position to make a FICO score guesstimation because we don't have all the facts. We can talk about what "may" happen until pigs fly. I hear the spirit of your message though.
6th Gear
Joined: May 2005
Posts: 15,478
Likes: 2
Originally Posted by MJO MINI
Chows4us, I hear you, and I think you may be oversimplifying how FICO works. It is much more complex than that. Bottom line is neither of us are in a position to make a FICO score guesstimation because we don't have all the facts. We can talk about what "may" happen until pigs fly. I hear the spirit of your message though.
- You just lost some of that unused maximum credit
- "they" like the fact you have accounts opened 20 - 30 years, proves your reliable
Thread Starter
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4th Gear
Joined: Feb 2006
Posts: 308
Likes: 0
From: Castro Valley, CA
From what I've read, the amount of outstanding CC debt really only impacts your FICO score when you're over 75% of your total combined limit. That being the case, it's a non-issue.
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