Buying a car: Credit card vs. Bank loan?
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Can a math wizard help me with this? If I used a credit card with a fixed APR of say 5%, would it cost me the same over the same lenght of time if i were to take out a loan with a bank for the same amount of money at the same 5% interest rate.
So lets say I take out a bank loan on a car and pay 250.00 a month for 36 months at X% interest rate,i would pay the bank $9000.
What if I used my credit card which offered the same X% interest rate for a promotional period of 36 months. I would pay the credit card $250 a month for 36 months. My question is does that pay off the loan just as the bank loan would have, or is the interest calculated different.
Buying a car: Credit card vs. Bank loan?you have to look at the terms of the loans. Often the interest on car loans are compunded monthly. read the fine print on your credit card's terms of services. i have seen cards where the interest is compounded daily. this will result in significantly higher costs over the life of your loan.
additionally, if the amount you are borrowing is a large percentage of your credit limit, it will hurt your credit score if you carry that sort of balance on your credit card for extended periods of time. a car loan will not hurt your score as much as a credit card balance would.
Buying a car: Credit card vs. Bank loan?Go with the one with the lowest interest.
Buying a car: Credit card vs. Bank loan?It's all on credit, and that's the main factor here.
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