Author Topic: Paying Off A Loan With A Credit Card...  (Read 2425 times)

GCinOKC

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Paying Off A Loan With A Credit Card...
« on: May 22, 2015, 02:04:53 PM »
So, I have a Wells Fargo Visa credit card that has 0% interest for 15 months and a $5,000 credit limit. I have $0 balance on it as I have not used it yet. I have a loan through a local credit union that I took out a year and a half ago to consolidate some stupid credit card debt on high interest cards. The current balance of the loan is $6,500 and has an interest rate of 10.95% which is high, but lower than the cards were. Does anyone know if it would be possible to pay off $5k of the loan using the Visa credit card and pay off the remaining $1,500 with cash? I am on track to pay off the loan by October by funneling all extra money each month to paying this off since I just got my other debts all paid off, so I had already planned on making big payments the next 5-6 months, but if I could use the Visa card to pay $5,000 of it and then pay the Visa off over the next few months I'd save the money in interest I would have paid the credit union over the next 6 months since the Visa has 0% for 15 months, right?

I just didn't know if it would be considered a cash advance though, which does not qualify for 0% interest. I can't seem to get a straight answer from the credit union over the phone if they'll even accept this form of payment, and I haven't found much info on Wells Fargo's website about if it would be considered a cash advance or a purchase. Just thought I'd see if anyone has any idea? Thanks!

forummm

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Re: Paying Off A Loan With A Credit Card...
« Reply #1 on: May 22, 2015, 02:10:52 PM »
Yes, you can probably do this. They may chage you a balance transfer fee though, which will cut into the amount you might save. If the fee is high enough (they can be 4% or 5% up front), it might be a wash altogether (only 5 months of paying a decreasing amount of interest).

RunHappy

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Re: Paying Off A Loan With A Credit Card...
« Reply #2 on: May 22, 2015, 02:19:53 PM »
Maybe.

Some loans do not allow payments to be made with a credit card at all, so you would have to check.  For the ones that do you might have to pay a percentage fee in order to do it which might wash out the savings.

Le Poisson

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Re: Paying Off A Loan With A Credit Card...
« Reply #3 on: May 22, 2015, 02:31:33 PM »
We have done exactly what you are contemplating by getting a promo card through MBNA. They often offer a 1% fee (min. $7.50) balance transfer up to $10,000. (http://www.mbna.ca/credit-cards/view-all-cards/index.jsp)

You transfer the balance of the loan to the credit card and then nail it hard until the promo rate (0%) runs out. But beware, if you keep the card beyond the promo rate, you are back up to paying huge amounts of interest.

For this reason, we keep a small balance on the original loan with the allowance to transfer the rest back if our financed go over a cliff.

Isn't fighting the debt emergency fun! Gah, I can't wait to be past this stage.
« Last Edit: May 22, 2015, 02:35:53 PM by Prospector »

PJ

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Re: Paying Off A Loan With A Credit Card...
« Reply #4 on: May 22, 2015, 02:48:29 PM »
As others have said, it should be neither cash advance or purchase, but balance transfer.  You should be able to find out about this easily by calling Wells Fargo, as well as finding out about any possible "balance transfer fee."  As to how to pay it, you may be able to request cheques for the VISA card, which you would then send to the credit union as "payment" just as if you'd paid with a personal cheque.

horsepoor

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Re: Paying Off A Loan With A Credit Card...
« Reply #5 on: May 22, 2015, 03:03:04 PM »
FWIW, I paid off a credit union vehicle loan using checks from my Chase Freedom card when they offered free balance transfers.  The checks they send now have a 2% balance transfer fee, which still isn't bad if it helps you get out from under 10.95% interest and you're sure you can pay the balance off during the 0% interest timeframe.  Another thing you could do, is put your normal spending on the cc to free up more cash towards the loan as long as you watch your balance and can shift into repaying the cc prior to the promo rate period.