Someone else posted a thread about this type of thing recently - using one of those blank checks with a super low rate that your credit car company sends you. There are some huge negatives to it that were discussed, one I can remember being that if you're late with a payment, the rate shoots up to whatever the normal rate on your credit card is (over 10%). Search the threads for a look-see.

 

thanks! I'll check that out. That is absolutely true - if you are late with a payment, the finance charge goes up to the normal rate which is 17-18% or something rediculous like that since this is a points card However, if you schedule the payment with the bank, that should not be an issue.

 

4.9% with United SA federal Credit Union--formally USAA Federal Credit Union

 

Exactly. A bigger "gotcha" is if you use the card for anything else, your payments go to the lower interest portion of the overall debt first. I.e., if you have $15,000 on your card at 1.9% interest, and $2000 at 16% interest, when you make a payment, it goes toward the $15,000 portion first, while the higher-rate portion accrues interest. The way to avoid this is to maintain only one transaction on the card -- the low interest one.

 

Credit card companiies can also change your interest rate at will even if you are never late or miss a payment. For example if something else happens that affects your credit rating in a negative way, they an hike your interest rate up. Happened to me a few years ago, one card jacked my rate up from 10% to 29% even though I was a long time member in good standing who was never late or missed a payment. I got it taken care of pretty quickly, but it was a huge hassle, and taught me a valuable lesson about credit companies.

 

you also need to have a $25k+ credit limit...

 

I found the thread where you were determining whether to do this or not. Like you, we don't use this credit card for anything else really and we'll just take it out of our wallet. I know about this gotcha cuz I've actually been screwed by it in the past - I had an automated payment going to card that I put something on. Like you, I pretty much use my Amex for everything now. What did you wind up doing?? (if you don't mind me asking?)

 

and scary as well. Fortunately, we do not need to finance that much of the car - we are paying for about 2/3 of it in cash up front. This will just be the remaining third. Still a decent size chunk of change but not quite as damaging as if we were financing the bulk of it.

 

wow - never had that happen...... I would think something would have to be really wrong for that happen, i.e. they made a mistake or if we really did screw our credit up somehow. I am not too afraid of the later issue - we're pretty fortunate in where we are financially and the first issue would most likely be a pain above and beyond just this charge.

In any case, I'll accept the risk for a no-fee 1.9% loan... its about as close to free money as you can get. With the interest rates above 6%, it just doesn't make sense for me to do anything else. Credit unions are not an option - there are not really any that we can join so we're stuck with commercial rates.

 

The car's still on the boat, so we haven't done anything yet. But, it's likely we're going to lease.

 

In our case the rate increase came about because we had relatively high balances on several other credit cards (we carried two mortgages for almost a year and had to spend more than we wanted to on plastic) and were perceived to be a credit risk even though we had no negative marks on our credit history, like missed or late payments or anything else. They just decided were might be a credit risk and jacked our rate to almost 30%.

-Keith

 

Off topic; read the disclosures that come with the statement(if one comes with it). CC companies have been known to change the terms of the contract and give you notice that they are. If you disagree, they will close the account, and you will keep the same terms. If you don't say anything after so many days, like 60, it becomes your new agreement. This happened to me before so I pay close attention to the statements and disclosures now.

 

Mineon was referring to the Universal Default clause. UD usually goes into effect if you are late with another credit card company but can also go into effect if you are sent to a collections agency for some reason, ie a charged off electric bill balance that you never received because you moved. Capitol One is the only credit card company that claims not to have a UD clause. If a credit card company invokes UD your nice fixed 7.9% will skyrocket to a variable rate upwards of 30%. The moral of the story is to PAY ALL OF YOUR BILLS ON TIME USING ONLINE BILL PAY AND PAY THE ENTIRE BALANCE EVERY MONTH IF AT ALL POSSIBLE. Believe me credit card companies are out to get you if you let them. Trust me I work for one of the largeset

 

Make sure you really need the gap insurance or you're just throwing your money away. If you have any sort of downpayment this is probably not necessary since you should never be "upside down" on your loan, what with MINI's high book value.

 

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Hmm...I'm not a Costco member (probably the only one in the United States who isn't)...I wonder if they factor in how long you've been a member when they are qualifying you for a lower APR. Did they explain the details to you Lars? Wescom credit union is offering the lowest I've seen at the moment (or that I'm qualifying for) which is 5.99%. University Credit Union (my UCLA) credit union only has a straight 6.5% across the board - you either qualify or you dont.

Maybe I should try the Costco route?

 

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it is only 35 bucks for a membership and 5.24 is way lower than average... of course I am sure their rates differ depending upon your credit, etc. You could also try going straight to Cap One Auto and see what they give you without Costco membership

 

Quick question..

if I'm purchasing of state and paying the taxes on my car when I get back home and license it, is there still a way to wrap my taxes into the loan?

 

your institution that you are loaning money from sends you the check. I know a lot of companies do this.... Peoplefirst which I think is Capital One Auto definitely just sends you a check for the amount you need. You would have to just include the taxes in what you borrow. If it is direct financing from the dealership (mini or BMW), I don't know if you can do it.

 

yeah, with a "blank check" from capital one i guess i would have to cash it out to myself and then write a check to the dealer and then one to the state later on.

 

Knock on wood as I haven't been approved yet....

But I was quoted 6.49% @ the Mini dealer.

I am going through my credit union which apparently has a deal with BMW.

2% for 6 years!

WOO HOO.

 

2%?!

Lucky!