Credit Card Question

[madrussian]

I have 4 credit cards right now, and I'm 19. I know I know...

2 are paid off and haven't been used in months. 2 have balances and still have 0% APR.

I want to buy a motorcycle, and I was going to open up a 5th card to buy the motorcycle and transfer a balance from one of the cards nearing the end.

How bad is this?

My credit score right now is at 704.

I have $2500 on one card and $2000 on another in balances. However the $2000 0% isn't up until next June. The $2500 is up in October.

What do you guys suggest?

Also how long do I need to wait before closing an account or card I don't use? I've heard its bad to close early...

Any help would be appreciated. Just don't chime in w/ "Credit Cards are evil" "Wtf do you have 4" and "Dont buy a bike till the cards are paid off"

TIA!

[34saving]

If you're sure you can pay off the motorcycle before the 0% time is up, use the credit card. If you're not sure about that, look into more traditional financing (or save the money first). Don't cancel any of the cards. Just throw them in a fairly secure filing cabinet and forget about them. (Unless they have annual fees, in which case they should be cancelled, but I can't imagine with a 704 you're paying annual fees . . .)

Also be sure that you can transfer new balances at 0% AND make a purchase at 0% with the new card. Lots of cards let you do one or the other, but I haven't seen many at all that let you do both. Also check those balance transfer fees. They're steep, but sometimes you can get them waived if you negotiate BEFORE the balance transfer takes place.

[madrussian]

Well I don't know for certain, but I'm pretty sure the 4 cards I have, and the 2 paid off don't have annual fees. I've been told to look out for that...

They for sure have 0% APR on purchases till Nov. 07 and 0% on transfers if I do them now, tho I don't think I'll transfer, I'll only buy the bike.

[Ima saver]

Don't close the cards, just lock them away. How much is the motorcycle?

[madrussian]

Motorcycle is $9000. I got an offer for a CC for 0% APR till next Nov then fixed of 8.99

It'd be enough to swing payments till thena dn I'm pretty sure by then I'll have the money I borrowed to family repaid to me so its not a big deal.

[poundwise]

I just love it when people ask a question of you and then tell you how not to answer.

I think its foolish to buy a motorcyle with a credit card. If you honestly believe you'll have $9K by November, either wait until then and buy the bike with cash, or get a loan through the dealer/motorcycle company and pay if off early. What's the advantage of putting it on a credit card, especially a new one, when you are already carrying balances on cards that won't remain 0% forever?

[debtdude]

I agree with poundwise. If you "have the money coming" then wait until you have it. From experience, I say the money isn't guarantteed until it is in your hands. 9K on top of an existing 4k in debt would put you at $13k with a "hope the money is coming soon" IOU.

DON'T BUY THE MOTORCYCLE. If you are owed money greater than your debt, wait until you have that money, pay off your debt and then decide if you want to go into debt again.

[jmjj215]

I'd kind of like to know what your income/expenses are before I weigh in.

[neatdesign]

Originally Posted by madrussian

Any help would be appreciated. Just don't chime in w/ "Credit Cards are evil" "Wtf do you have 4" and "Dont buy a bike till the cards are paid off"

Well, obviously not -- if you really wanted "any" help then you wouldn't have told us to limit our answers to what you want to hear.

In any case, here's what I'm reading:

You are 19 years old. You have 4 credit cards -- two of them with $4500 owed on them. One of them you most likely just got last month, because you said the 0% is good through June 2007. The other one has also been opened less than a year (again, basing this assumption on the fact that the 0% ends in October, and 0% intro offers rarely exceed 12 months).

You are looking to buy a $9000 motorcycle, which would bring your overall credit card debt up to $13,500. (I doubt this includes any extra costs involved with owning the motorcycle, such as insurance, fuel or maintenance, however.) You want to open another credit card in order to buy this motorcycle.

Are you sure that you can even get another credit card with a $9000+ credit limit to accommodate this purchase? What if you apply and are only approved for $1500 or $2000? Or even $500, for that matter?

Do you actually NEED the motorcycle? Can it wait until you are able to pay for it in cash? If you are expecting money to be reimbursed by someone who borrowed from you, are you absolutely certain they'll pay it when you need it to be paid?

What other kinds of debt do you have? Car payments? Student loans? etc. What is your current take-home income?

In my opinion it would not be a smart move at this point to take on $9000 in new debt, and/or to get a new credit card. You would be putting yourself in a situation that could very easily spiral out of your control, and snowball you into even deeper debt, and at such a young age. I know that's not what you want to hear, but that's my opinion.

~ Jenney

[Ima saver]

I have to agree with jenney, that is a lot of debt for a 19 year old. Wait a while.

[vsjhoc]

Originally Posted by madrussian

Also how long do I need to wait before closing an account or card I don't use? I've heard its bad to close early...

Don't close them. Your credit score is partly determined by the length of your credit history. You began your history at age 18, so keep at least the very first card you got, and keep it in good shape by always paying on time. Forever.

Your score is also determined by the average length of all your accounts. So keep several in good shape by charging small amounts and always paying on time. Don't open any more for a while, because too much "new" credit counts against you.

I think everyone has covered your other questions ...