Credit Card for Auto Purchase
Author: Bodhica
Posted: Sun Oct 31, 2004 3:51 am
Post subject: Credit Card for Auto Purchase
Greetings all,
I am looking to finance a $10,000 used automobile which I plan to buy used from an individual (not a dealership). I am leaning towards using a credit card to finance this vehicle instead of an auto loan for three reasons (please correct me if I'm mistaken on any of these):
* There are no penalties for paying my debt off early (I plan to pay it off within a year)
* A credit card company would not mandate the fulfillment of any certain requirements for caring for the vehicle (such as auto insurance)
* If I were to default on my debt, a credit card company would not have to power to repossess my car
My needs in a credit card are three-fold:
* A credit limit which will meet or exceed $8,000 - $10,000
* A low cash-advance fee
* A low cash-advance APR
My credit history is good. I've paid off about $10K in credit card debt before without any incidence of late payment. I currently have about $7K in credit card debt which I'm quickly paying off. In all, since I first established my credit about 6 years ago, I have 2-4 late payments total. I currently have about $2K in the bank and about $1500 coming in monthly (but don't pay rent). I first established a checking account around 1994 which I have maintained since.
Questions I have:
* Would it be best to put the $2K I currently have towards my credit cards in order to improve my credit standing before applying for a credit card with a $10,000 limit or should I apply this money as a down payment on the car?
* What credit cards would be best to fulfill the needs I have (cited above)?
* I don't want to wear out my credit rating by applying to many credit cards which don't approve me for the credit limit I'm seeking. What credit cards which would be most likely to fulfill my needs be and approve me?
* As a full-time, independent student, might there be any special credit cards which I could qualify for that would fit my needs?
* Is there any way around having to charge this debt as a cash advance (and incur consequent charges)?
This is my first time actively seeking a high-limit credit card. Any other advice would be welcomed. Also, if anyone has any alternative ideas for financing this vehicle which are better than mine or if you know of any resources I might utilize to answer my above questions, this as well is very welcome.
Thanks in advance for your help!
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
author: Ira
Posted: Mon Nov 01, 2004 4:36 am
Post subject:
Yes, you can finance a car with a credit card, but how in the world are you going to get an individual to accept a card as payment? Anyone accepting a credit card would have to have a merchant account. In other words, they would have to have a business.
_________________
Do not let what you cannot do interfere with what you can do.
Author: rhwbullhead
Posted: Mon Nov 01, 2004 6:55 am
Post subject: Credit Card for Auto Purchase
Ira wrote:
Yes, you can finance a car with a credit card, but how in the world are you going to get an individual to accept a card as payment? Anyone accepting a credit card would have to have a merchant account. In other words, they would have to have a business.
It looks like the OP wants to do a cash advance to pay for the card. AFter all, the OP asks which cards have a low cash-advance fee and APR.
Author: HJM
Posted: Mon Nov 01, 2004 2:24 pm
Post subject: Credit Card for Auto Purchase
Average cash advance fee is 3%, so you're looking at $300 in fee. However, with the exception of MBNA, most credit card issuer set a lower cash advance limit, so it may be difficult to get at credit card with $10,000 cash advance limit. Moreover, there is a limit on the amount of cash advance. For example, you have to do 20 ATM withdrawals for a card that has $500 per ATM cash advance transaction. Finally, most credit card charge 18% up for cash advance.
There is a few alternatives.
1. Credit unions usually don't charge cash advance fee. However, the interest rate for cash advance still higher than typical car loan.
2. Since you plan to pay it off in a year, you can apply for card with 0% APR on balance transfer for 1 year. I know one credit card issuer (GM Card/Household Bank) that let you write balance transfer checks, included in the welcome package, to yourself and still treat it as balance transfer. Hence, you can use the whole credit line, and don't have to pay interest. However, Household bank gives low credit line according to my experience.
3. MBNA currently have 2.9% promotion on balance transfer and cash advance for six months. I'm getting checks and e-mails about it on all my credit cards I have with them. MBNA may be the way to go because they are very generous with credit line, and the credit line is also your cash advance limit.
Author: Board Monitor
Posted: Mon Nov 01, 2004 3:51 pm
Post subject:
I think the balance transfer option would be the best. As HJM points out, some card issuers do allow you to make the check out to yourself or to creditors (other than credit card companies). Just check with them prior to verify prior to applying.
By the way, good to see you around again HJM! Seems like it's been a while since I saw any posts from you...
_________________
Regards,
Curtis Arnold
Board Monitor
http://www.CardRatings.com
20K+ Credit Card Reviews
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Posted: Sun Oct 31, 2004 3:51 am
Post subject: Credit Card for Auto Purchase
Greetings all,
I am looking to finance a $10,000 used automobile which I plan to buy used from an individual (not a dealership). I am leaning towards using a credit card to finance this vehicle instead of an auto loan for three reasons (please correct me if I'm mistaken on any of these):
* There are no penalties for paying my debt off early (I plan to pay it off within a year)
* A credit card company would not mandate the fulfillment of any certain requirements for caring for the vehicle (such as auto insurance)
* If I were to default on my debt, a credit card company would not have to power to repossess my car
My needs in a credit card are three-fold:
* A credit limit which will meet or exceed $8,000 - $10,000
* A low cash-advance fee
* A low cash-advance APR
My credit history is good. I've paid off about $10K in credit card debt before without any incidence of late payment. I currently have about $7K in credit card debt which I'm quickly paying off. In all, since I first established my credit about 6 years ago, I have 2-4 late payments total. I currently have about $2K in the bank and about $1500 coming in monthly (but don't pay rent). I first established a checking account around 1994 which I have maintained since.
Questions I have:
* Would it be best to put the $2K I currently have towards my credit cards in order to improve my credit standing before applying for a credit card with a $10,000 limit or should I apply this money as a down payment on the car?
* What credit cards would be best to fulfill the needs I have (cited above)?
* I don't want to wear out my credit rating by applying to many credit cards which don't approve me for the credit limit I'm seeking. What credit cards which would be most likely to fulfill my needs be and approve me?
* As a full-time, independent student, might there be any special credit cards which I could qualify for that would fit my needs?
* Is there any way around having to charge this debt as a cash advance (and incur consequent charges)?
This is my first time actively seeking a high-limit credit card. Any other advice would be welcomed. Also, if anyone has any alternative ideas for financing this vehicle which are better than mine or if you know of any resources I might utilize to answer my above questions, this as well is very welcome.
Thanks in advance for your help!
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
author: Ira
Posted: Mon Nov 01, 2004 4:36 am
Post subject:
Yes, you can finance a car with a credit card, but how in the world are you going to get an individual to accept a card as payment? Anyone accepting a credit card would have to have a merchant account. In other words, they would have to have a business.
_________________
Do not let what you cannot do interfere with what you can do.
Author: rhwbullhead
Posted: Mon Nov 01, 2004 6:55 am
Post subject: Credit Card for Auto Purchase
Ira wrote:
Yes, you can finance a car with a credit card, but how in the world are you going to get an individual to accept a card as payment? Anyone accepting a credit card would have to have a merchant account. In other words, they would have to have a business.
It looks like the OP wants to do a cash advance to pay for the card. AFter all, the OP asks which cards have a low cash-advance fee and APR.
Author: HJM
Posted: Mon Nov 01, 2004 2:24 pm
Post subject: Credit Card for Auto Purchase
Average cash advance fee is 3%, so you're looking at $300 in fee. However, with the exception of MBNA, most credit card issuer set a lower cash advance limit, so it may be difficult to get at credit card with $10,000 cash advance limit. Moreover, there is a limit on the amount of cash advance. For example, you have to do 20 ATM withdrawals for a card that has $500 per ATM cash advance transaction. Finally, most credit card charge 18% up for cash advance.
There is a few alternatives.
1. Credit unions usually don't charge cash advance fee. However, the interest rate for cash advance still higher than typical car loan.
2. Since you plan to pay it off in a year, you can apply for card with 0% APR on balance transfer for 1 year. I know one credit card issuer (GM Card/Household Bank) that let you write balance transfer checks, included in the welcome package, to yourself and still treat it as balance transfer. Hence, you can use the whole credit line, and don't have to pay interest. However, Household bank gives low credit line according to my experience.
3. MBNA currently have 2.9% promotion on balance transfer and cash advance for six months. I'm getting checks and e-mails about it on all my credit cards I have with them. MBNA may be the way to go because they are very generous with credit line, and the credit line is also your cash advance limit.
Author: Board Monitor
Posted: Mon Nov 01, 2004 3:51 pm
Post subject:
I think the balance transfer option would be the best. As HJM points out, some card issuers do allow you to make the check out to yourself or to creditors (other than credit card companies). Just check with them prior to verify prior to applying.
By the way, good to see you around again HJM! Seems like it's been a while since I saw any posts from you...
_________________
Regards,
Curtis Arnold
Board Monitor
http://www.CardRatings.com
20K+ Credit Card Reviews
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
posted by CardRatings.com at 10:35 PM
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