By: Revanche

Project: Auto Loan Payoff, Part II

July 13, 2006

The Game Plan

If I want to keep the length of the term the same, then I have to calculate the paydown for 26 months. Obviously my top choices would be the 0% BT with no transfer fees, but I prefer not to apply for new credit if I don’t have to, and I don’t want to max out my opportunities for good 0% BTs if I can fully utilize these credit lines that are just sitting here without any benefits like the Citi Credit Protector Retention Offers. At most, I’ll shuffle my credit lines to acccommodate and maybe ask for an increased limit if absolutely necessary.
It also seems most prudent (and simpler!) to select a single card/credit line to carry the entire balance on for life, rather than breaking it up amongst two or more cards with lower APRs because that may necessitate more BT fees and frankly, it would complicate matters more than I’m willing to juggle. I’m not ruling it out entirely, but it’s not on the list of preferred strategies.

So far, the best offers from Chase are:

With BT fee ($75 max), 4.99% until the balance is paid in full

$557.01 monthly payment
Time to payoff: 26 months
(I’m using AOL Finance & Money’s Calculator to see how much interest we’d be paying total): $782
With the fee: $782 + $75 = $837

With the usual $400 monthly payment
Time to payoff: 38 months
Total cost: $1110

With the fee: $1110 + $75 = $1185

With no BT fee, 6.99% until balance is paid in full

$569 monthly payment
Time to payoff: 26 months
Total cost: $1103

$400 monthly payment
Time to payoff: 39 months
Total cost: $1626

Thoughts: Wow, this doesn’t look as great as I imagined. I mean it’s still better than the 2684 no matter which range I go with, I just don’t like that it stretches out the time to payoff to another year. The highest total savings would be $1499, which is a rather large chunk of change!
There is always the option to transfer it again to a 0% when/if that comes available.
Or there’s always the option to transfer a large amount to a 0% and refi the remaining amount, but the only 0% option I have is with the Schwab card for about 8 months.

Anyway, I’ll have to sleep on this because I’m not entirely sure that I want to take on another $13700 of unsecured debt when, as I’ve said before, I’m the emergency cushion for the family. When I took on their credit card debt, I was UBERstressed until I had saved enough to payoff the entire amount if I needed to. Not only do I not have enough in my emergency funds to cover it, I would essentially be asking myself to put away … about $20k in a very short period of time! I don’t deal very well with uncertainties, especially financial uncertainty.

Is this worth it?

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