Thread: Personal Loan vs Credit Card At 0 Percent?

I was just approved for a credit card with a 21 month 0% intro APR. I intend to use it in place of a personal loan for the length of the intro APR. I will use it for a large, one-time purchase and make no additional charges on it..

My credit limit is $11,200 and would like to charge 10k to 11k and then make $500+/- payments.

Is this stupid? Will this ruin my credit?

What follows is my opinion not advice or legal council.

It should not ruin your credit. You will take a hit for a new card and higher utilization. Also if anything goes wrong with the plan and you fail to pay it before the end of 21 months, you will have to pay some interest. Depending on the card agreement that interest could get hefty.

Ruin is much to strong of a word in my opinion. You will take a ding, but it is something that can be made right again.

I agree with sticf.

It's not good to have such a high utilization and that will damage your credit for several months. But once you get the card paid down to below $3000 your credit will bounce right back up within a couple of months.

And as was said, if something goes wrong you could end up with hefty interest.

Also, read the agreement fine print very carefully. You could get suckered into an agreement that is very expensive compared to the personal loan.

Do you think it's better to do-

- personal loan at 5 years, 11.99% interest, through Discover Financial
- transfer my balance over and over for 5 years

I know it is cheaper to do the balance transfers but I like the security of knowing my rate will be locked in for 5 years. I remember during recession there were no 0% offers and if that happened again then i could be left off worse using the BT method.

I would not depend on credit card offers. I would lock it in and pay it off.

If you take the personal loan, you will ultimately benefit your credit score in the long term. This is because a personal loan is a debt with fixed terms and a fixed amortization schedule whereas a credit card balance transfer is just opening another revolving account. In other words, your score will actually increase the month you pay the personal loan off because it will be reported as a paid and closed account.