Using a Credit card to pay off a loan!

[lholhos]

Ok i have a personal loan with FNB(R30000) @ 28% interest, and now FNB just offered me a credit card limit increase of R45000 @19.5....Im thinking of accepting and use the money to pay off the loan..Save on the interest...and wont be paying no other "funny fees".. Also i will structure my credits funds so that i have more money on budget than straight facility and apply for budget transfer and with that i will pay 9.9% for the 9moths...Good plan?
What do you Guys think?

[marco79]

It could work. Just be careful not to fall into a even deeper credit trap.

[Edduck]

You are trying to beat a bank at their own game, just find out first that this is possible... There might be a clause somewhere that you are not aware of that can dig a deeeeeeep hole for you...

[lholhos]

It could work. Just be careful not to fall into a even deeper credit trap.

Im Very careful when it comes to credit..I will pay off the credit card in September/October or so! im leaving my current company, I have about 30days and Medical Aid savings...Im planning to use this payout also or even pension fund(2 years of service)

[Mike Smit]

FNB also offered me a R50k overdraft at 19% and I accepted it. I used it to pay off my ABSA CC and have now paid up the overdraft.

Makes sense to me to use debt of lower interest to pay off the ones with higher interest. Just make sure you pay off the debt and CLOSE the account.

[Dr Who]

I think it is a very good idea. In essence you are replacing debt with the highest cost with debt costing less. You will be shocked at how much it helps you reduce the capital balance. You would also be decreasing your available credit, this may also prevent you from becoming even more trapped.

Cost of debt per month dropped from R700 to R488, what you must due is put that saving back.

[lholhos]

You are trying to beat a bank at their own game, just find out first that this is possible... There might be a clause somewhere that you are not aware of that can dig a deeeeeeep hole for you...

Yeah man!Im thinking ahead. I try not to fall into traps but you know how banks are, they dont tell you everything but i "trust" FNB... I but i think I have a plan. I have a financed Citi 1.4 SPORT with MFC at 13.5% that i plan to pay out also, using this Credit card.last time i checked my balance was like R50 000..so if i do this i might be only paying the credit card December(pity i wont be getting my full bonus(13th cheque otherwise i would start the new year debt free and concentrate more on saving)

[DrYes]

On CC don't they charge you interest on the interest so it eventually works out to the same.

Advice.Tear up that credit card and work towards paying of that personal loan as soon as possible.

[lholhos]

FNB also offered me a R50k overdraft at 19% and I accepted it. I used it to pay off my ABSA CC and have now paid up the overdraft.

Makes sense to me to use debt of lower interest to pay off the ones with higher interest. Just make sure you pay off the debt and CLOSE the account.

Just need to know how to manage a credit card...I don't get excited

I think it is a very good idea. In essence you are replacing debt with the highest cost with debt costing less. You will be shocked at how much it helps you reduce the capital balance. You would also be decreasing your available credit, this may also prevent you from becoming even more trapped.

Cost of debt per month dropped from R700 to R488, what you must due is put that saving back.

sure man, I am changing my scheduled savings transfer amount to R800 form R500 now..Its my 32 notice FNB account

[lholhos]

On CC don't they charge you interest on the interest so it eventually works out to the same.

Advice.Tear up that credit card and work towards paying of that personal loan as soon as possible.

Say I structure my CC like this Straight = 15000 and budget= 30000
and transfer that r30000 to straight at 9.9% so basically i will be paying 19.5% on the R15000 and 9.9 on 30000 rather paying 19.5% and im not planning to keep CC for loong!

[Beachless]

What are the costs for transferring money out of the CC?

[The_Librarian]

Overdrafts are lovely debt traps.

Avoid like the devil.

[etwylite]

sure man, I am changing my scheduled savings transfer amount to R800 form R500 now..Its my 32 notice FNB account

WTF?? You have a R30000 loan at 28% but you are also "saving" R800pm into a 32day notice account? is that what you are saying?

[DrYes]

Say I structure my CC like this Straight = 15000 and budget= 30000
and transfer that r30000 to straight at 9.9% so basically i will be paying 19.5% on the R15000 and 9.9 on 30000 rather paying 19.5% and im not planning to keep CC for loong!

no just tear up the CC now and pay everything in 6 months.

[D3x]

If you got a good credit record & earn above 30k Nedbank will give you the same loan at 12.5%. Take the consolidated loan from Nedbank & pay FNB off.

FNB's PL rates are nothing short of robbery!