Scott Bilker is the author of the best-selling book “Credit Card and Debt Management.” He is also the Editor and publisher of the FREE DebtSmart� E-mail Newsletter (http://www.debtsmart.com). Sign up today!
Dear Scott, I recently read your article about buying a card with a card. I have a 0% interest card and plenty of balance so it seems like a good idea. Problem is the seller is a private party. Obviously I can’t use a convenience check or a cash advance or I’ll blow the interest strategy. Is there a way to pay a private party so that it appears as a purchase on the card and not an advance? I have checked out PayPal but I’m not sure the seller is Internet active. Thanks. –Tracy
Thanks for writing!
Note: Everything I suggest in this response is what I would do. You must be careful to analyze your specific situation to be sure that it will work in your benefit.
Glad to hear the you read my article, Consider Financing Your Next Car with a Credit Card!
It’s great that you have a 0% deal on your credit card. I’ve used these deals in the past to purchase a few vehicles. Actually, it may not be such a problem that you seller is a private party. It’s the same problem that you may face at a dealership.
Dealership say they accept credit card payments however, many will not let you purchase the entire car with your credit card. They’ll allow you to put your down payment on the credit card but not the entire amount. This is because they don’t want to pay the merchant fees for accepting the card. These fees are probably at least 2%. Therefore, a dealer would also ask you to use a personal check or bank check.
You need to find out if your 0% deal is good for cash advances. I’m guess that this may not be the case or else you wouldn’t be asking, nevertheless, you should give your credit card bank a call and tell them that you’ll write yourself a check, and deposit it in your account, as long as it’s at the 0% rate.
If that doesn’t work then ask them if they would give you that 0% rate if they, the bank, did a direct deposit into your checking, or savings, account. The key is to get that money in your account at the 0% rate, preferably without any cash advance fees, then use that money to write a bank-check to car seller.
Say it’s the case that they still will not do this. They would probably entertain the idea of your transferring the balance from another card at the 0% rate, this way it’s not a cash advance. Then, check with you other credit cards to find out if you can get a cash advance, with no fees. If so, you can write a check with the second card, deposit it into your account, buy the car, then immediately call the 0% bank and do a balance transfer. When the smoke clears you’ll have that car at 0%.
You just need to do one more thing which, is to mark your calendar as to when the 0% deal expires. You must be sure to pay that off before they hike your interest rate. Also, don’t be late paying on that 0% deal! It’s probably true that the offering bank will slap you with a crazy-high interest rate as a penalty. I’ve seen some as high as 26% for late payers.
Good luck and please let me know what happens!