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? -- DeeDear 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?If you have a question for Terry, e-mail him at Driving for Dollars. Save money on your car -- sign up for Bankrate's new weekend Car & Money newsletter advertisementRelated Links:7 best off-to-college carsNational auto loan averagesWhat changes auto loan rates?Related Articles:All new cars for 20105 steps to 'clunker' dealTake the 'cash back?'
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.
If you have a question for Terry, e-mail him at Driving for Dollars. Save money on your car -- sign up for Bankrate's new weekend Car & Money newsletter