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As I was mulling over this situation in the shower this morning (having two toddlers, this is where I do my thinking), I suddenly remembered that I have a wealth of financially like-minded people to share this quandry with...so lend me your ears (ummm...eyes?) and let me know what you would do.
DH has a summer tuition bill due...um, not sure, but soon now. It is $1443. I was excited because we can pay this now without touching the emergency fund, and without needing student loans. In fact, I was all ready to do this. Then I received a new cc in the mail (apparently one that DH had signed up for at Yankee Stadium in order to get a Yankees hat, of which he already has five, probably in not his most sober state). After reaming out the hubby for getting a new cc which will invariably drop our stellar credit ratings (and after which he was *sincerely* apologetic, or at least trying to appease me), I looked at the fine print. It has a 0% interest rate until March of 2007. That got me thinking...
If I put tuition on this card, I will have in interest free for almost a year. I can then use the tuition money to pay down DH's car loan, which only has about $1900 left. If I can pay that off in three months, then I can use the $200 I send to them every month to pay off the cc in 7 months. But then I am back to carrying a cc balance, which I hate.
A few things to note:
I always make the cc payments on time, so I am not worried about the rate getting jacked up.
I have enough money in our emergency fund to pay off the cc balance several times over if I need to.
DH will have another tuition bill in two months, probably for $2800. We have not decided yet if we will be taking out more student loans for this or not.
Another question - does the new cc go on our credit report when it is issued, or when it is activated? We have not activated it yet - in fact, I was going to encourage (read: force) DH to call and cancel it without it being activated before I thought of this little plan. I know the credit inquiry will be there, but not sure if the card is on there yet. Anyone know? I should mention that this is not a HUGE worry, as our credit rating is in the high 700s and we only have three other cards, two of which have been opened over ten years...but still...
Any thoughts? Thanks!!
DH has a summer tuition bill due...um, not sure, but soon now. It is $1443. I was excited because we can pay this now without touching the emergency fund, and without needing student loans. In fact, I was all ready to do this. Then I received a new cc in the mail (apparently one that DH had signed up for at Yankee Stadium in order to get a Yankees hat, of which he already has five, probably in not his most sober state). After reaming out the hubby for getting a new cc which will invariably drop our stellar credit ratings (and after which he was *sincerely* apologetic, or at least trying to appease me), I looked at the fine print. It has a 0% interest rate until March of 2007. That got me thinking...
If I put tuition on this card, I will have in interest free for almost a year. I can then use the tuition money to pay down DH's car loan, which only has about $1900 left. If I can pay that off in three months, then I can use the $200 I send to them every month to pay off the cc in 7 months. But then I am back to carrying a cc balance, which I hate.
A few things to note:
I always make the cc payments on time, so I am not worried about the rate getting jacked up.
I have enough money in our emergency fund to pay off the cc balance several times over if I need to.
DH will have another tuition bill in two months, probably for $2800. We have not decided yet if we will be taking out more student loans for this or not.
Another question - does the new cc go on our credit report when it is issued, or when it is activated? We have not activated it yet - in fact, I was going to encourage (read: force) DH to call and cancel it without it being activated before I thought of this little plan. I know the credit inquiry will be there, but not sure if the card is on there yet. Anyone know? I should mention that this is not a HUGE worry, as our credit rating is in the high 700s and we only have three other cards, two of which have been opened over ten years...but still...
Any thoughts? Thanks!!
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