auto

Roll car into conventional loan

Dear Terry,
I bought a car for my son with my credit card at a 7.9 percent interest rate. My credit union gives me 7 percent interest on a used car loan for 48 months. Will it be cheaper to keep the car on my credit card and pay it off in about 2½ years?
-- Dee

Dear Dee,
It may be cheaper in terms of overall interest to keep it on your credit card, but the risk is that, unlike a fixed car loan, your credit card company can change the terms of your agreement, which may raise the interest rate. Also, if you somehow miss the date of a payment, many credit cards automatically raise the interest rate.

My suggestion would be to roll the car into a conventional car loan and, if you could pay off the credit card in 2� years, get a car loan for the same term.

Here are this week's reader questions:
Some car options are not worth the cost.
Can I fight for a lower rate?
Who can I contact to discuss a lemon?
Is it cheaper to pay for car on credit card?
advertisement

Show Bankrate's community sharing policy
          Connect with us
advertisement
 

A little research could save you BIG on interest.

Don't have time? Our rate-tracker tool saves you time and money. Delivered Thursdays.
 
advertisement
Partner Center
advertisement

Blog

Tara Baukus Mello

Don’t buy used car with tax refund

Think twice before using your tax refund to buy a car -- at least for the short term.  ... Read more


Connect with us