Tweet
All though this may sound insane, I traded in my old car last year and bought my new car and put it on my credit card because they offered me 2.99 % financing for the entire life of the loan. The financing through the car people was 6% (which I initialy signed on for). This switch-a-roo a month later, made a 6 year loan turn into a 3 1/2 year loan (which I over-pay each month) and has caused my payment to drop each month by about $3 or $4 dollars (currently $155 dollars per month). I pay about $260 to $280; sometimes even more.
If times get lean, I can always revert to the smaller payment while I weather the storm. Don't freak out; the monthly payment is on auto pay so it can never be late, as is my other credit card. Additionally, I can pay the car off tomorrow if I wanted, but I get more interest on that money in the bank at 5%.
Though this is not for everyone, it has sliced and diced the interest we will have paid over the life of the car loan considerably. The credit card people offer these insane rates because they hope you'll dig a deep hole and charge more. Yeah right. I can turn pennies into copper wire.
Too, because I went from a secured loan to and unsecured loan, I have the title to the car. That means I have wiggle room with insurance rates if need be, all though I always get high coverage ect. I feel better knowing my car can't be repossessed or some other nasty if some calamity befell me and the wife.
One tip that has also really helped the wife and I with budgeting, is to break down the car payment (and house payment) into weekly amounts. This helps spare us the huge end of the month hit to the checking account, and gives us wiggle room on those months that have five fridays instead of four (that extra payday). Wether you just do it on the computer or actually write out four seperate checks and set them aside, this has really helped us.
I even do my insurance the same way: Our life insurances, home owners insurance, additional home owners insurance, and car insurance is all paid yearly. So, every week, I put aside about $33 and then at the end of the year when if all comes do, the money is all ready there. No monthly "service" fees of $3 here and there and I get a little bit of interest on the money (my money). Not to shabby.
I know other people who have done the same thing with those insane credit card offeres come knocking at 1.99% to 3.99 % interest.
In fact, my uncle buys everything through his American Express Business card (tens of thousands of dollars of inventroy) which he pays off each month and subsequently gets this insane rewards out the wazoo.
Power to him!
Infact, a person could with a high enough credit limit, borrow 90% of the money, put the first year's payments aside, and put the rest in a CD, then at the end of the term pay the credit card back and make a bit of interest on the bank's money. Only, you'd have to have a really high credit limit.
But, that's not for me.
Yes, I admit, I one of those people who pays zero interest on my credit cards, pays in full every month, and pockets $300 rewards cash a year (x2) because I have two cards that I alternate back and forth as the limit of rewards taps out).
Well, it's free money.
If times get lean, I can always revert to the smaller payment while I weather the storm. Don't freak out; the monthly payment is on auto pay so it can never be late, as is my other credit card. Additionally, I can pay the car off tomorrow if I wanted, but I get more interest on that money in the bank at 5%.
Though this is not for everyone, it has sliced and diced the interest we will have paid over the life of the car loan considerably. The credit card people offer these insane rates because they hope you'll dig a deep hole and charge more. Yeah right. I can turn pennies into copper wire.
Too, because I went from a secured loan to and unsecured loan, I have the title to the car. That means I have wiggle room with insurance rates if need be, all though I always get high coverage ect. I feel better knowing my car can't be repossessed or some other nasty if some calamity befell me and the wife.
One tip that has also really helped the wife and I with budgeting, is to break down the car payment (and house payment) into weekly amounts. This helps spare us the huge end of the month hit to the checking account, and gives us wiggle room on those months that have five fridays instead of four (that extra payday). Wether you just do it on the computer or actually write out four seperate checks and set them aside, this has really helped us.
I even do my insurance the same way: Our life insurances, home owners insurance, additional home owners insurance, and car insurance is all paid yearly. So, every week, I put aside about $33 and then at the end of the year when if all comes do, the money is all ready there. No monthly "service" fees of $3 here and there and I get a little bit of interest on the money (my money). Not to shabby.
I know other people who have done the same thing with those insane credit card offeres come knocking at 1.99% to 3.99 % interest.
In fact, my uncle buys everything through his American Express Business card (tens of thousands of dollars of inventroy) which he pays off each month and subsequently gets this insane rewards out the wazoo.
Power to him!
Infact, a person could with a high enough credit limit, borrow 90% of the money, put the first year's payments aside, and put the rest in a CD, then at the end of the term pay the credit card back and make a bit of interest on the bank's money. Only, you'd have to have a really high credit limit.
But, that's not for me.
Yes, I admit, I one of those people who pays zero interest on my credit cards, pays in full every month, and pockets $300 rewards cash a year (x2) because I have two cards that I alternate back and forth as the limit of rewards taps out).
Well, it's free money.
Comment