Stupid question regarding no interest CCs

osxaddictFebruary 27, 2007

Hi all.. We've got an upcoming remodel that we're planning on doing traditional financing on (home equity loan), but in an effort to reduce the amount being financed over the 15 year period (and with a bit more upfront load if you will), I'm wondering about throwing $30-40k or so of the expense on a no interest credit card.. My concern is what sort of pitfalls I might encounter.. I can certainly take this amount and finance it as well or even take a loan on my 401k if I really want to (different topic there!).. Anyway, not sure I'm really interested in playing games with the different CC companies out there.. In this case, I'd only do this if I could get a card with 0 interest for several years -- I'd rather not get a new card every year and play those sorts of games.. Unfortunately, none of the Amex/MC or other no-interest cards seem to indicate how long the no-interest is good for..

Can someone slap some sense into (or out of) me?

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The major pitfall is no credit card company is going to give you 0% interest for several years - they're in the business to make money. My best guess would be 6 months max. The terms are usually buried in the ultra-fine print somewhere on the applications.

    Bookmark   February 27, 2007 at 8:20PM
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I'm missing something - if you need at least $40k for the remodel and your HELOC is a floating rate product, where does the 15 year period come in? Do you not have a floating rate HELOC?

When the CC interest kicks in, which it will, you lose the deductability of the interest on your taxes. Don't even consider borrowing against your 401k - wayyy too many issues with that one.

I'd stay with the HELOC and pay as much cash as you can toward the remodel cost. Financing as little as possible is, to me, the best way to lower interest paid.

    Bookmark   February 27, 2007 at 9:17PM
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Thanks for the info.. Actually I left out the total overall loan amount which is nearly $300k.. The $40 is just a small piece of the overall valuation.. No, we're not doing a HELOC as we want a fixed rate not floating.. If we were doing something that only needed $40k or so, I'd be more likely to play CC games. I was just thinking that IF I could reduce the overall 15 year loan amount by a bit it would make the 15 year part be a bit easier to chew on every month.. Anyway, I've heard enough to lose interest in doing something like this. Thanks for the comments!

    Bookmark   February 27, 2007 at 9:22PM
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I was surprised that you ever gave that idea house room in the first place.

How could you figure that you had a hope in he!! of being able to get a 0% card for an extended period?

I would have thought that you would have been more familiar with the games that credit card companies play than that!

Neva hoppen!

Are the plans for the reno. all in place and starting date firm?

How about delaying for a while and saving up to pay a larger portion as it's done?

Each of your dollars only works once. If you want the stuff now ... quite few of those future dollars must go to compensate the folks who helped you get the stuff now rather than waiting till you could afford to pay for a larger portion of the total cost with your own savings.

I just saw a slogan today that went, "Maturity is being willing to delay gratification".

ole joyful

    Bookmark   March 1, 2007 at 6:08AM
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Well.. I got the silly idea from a co-worker who knew someone that did that -- likely by switching companies frequently I guess.. I'm not a big fan of CCs in general (I've only got one) and generally never carry a balance.. I was just thinking that IF I was totally missing some sort of great deal I could plug into for a few years, that might be a way to reduce a few fees that would otherwise be associated with a loan or CC.

Regardless, we're already pre-qual'd on the loan and proceeding towards funding.. While we don't have a concrete date to get started, we do have a hard-contractual date for our Solar installer to complete his work which is in August -- we're trying to get our project started ASAP...

    Bookmark   March 1, 2007 at 10:19AM
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Hi again osxaddict,

As I re-read this thread, it appears to me that my earlier post looks somewhat as though I'm slapping your wrist - what for, I'm not sure - assumed stupidity, maybe?

No - more like surprise that you're so unaware of how credit card cos. operate, maybe. Considering that they charge such high rates, extra fees, etc.

Anyway - no offence intended!

And it's still hard (even harder, recently?) to find a fee lunch (dratted keyboard's malingering again, that was supposed to be " ... free lunch")!

Good luck with having a renovation that pleases you, long-term, and finding appropriate financing.

ole joyful

    Bookmark   March 2, 2007 at 1:13PM
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joyful --

No problems -- I did not take it in offense or anything.. It takes a lot to annoy me and that certainly wasn't even close.. (8->

    Bookmark   March 2, 2007 at 1:17PM
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