hello,
i have a credit card with 3,000 balance on it and its a 0% for 1 more year. I do have 3,000 to pay it off. should i pay it off now? or invest the 3,000. I do hear of banks playing games with your apr
2006-07-30 10:56:03 · 8 answers · asked by sarah a 2 in Business & Finance ➔ Credit
I agree, if you invest the $3000 in something that you know will gain interest and not pay any penalities when you withdraw at the end of the year, then do it. You may be better off then paying off a credit card that doesn't allow you to gain any interest at all and then you lose out on the interest you may have gained. But only withdraw the amount needed to pay off the card and leave the rest in there then you will still be gaining interest on that amount.
2006-07-30 14:54:53 · answer #1 · answered by Samantha H 1 · 1⤊ 0⤋
Well if you have the $3000 and your credit card is 0% for a year you could put the $3000 CD and assuming you earn interest at 5% you will ear $150 in interest. Now you will probably pay atleast 15-20% of this interest to income tax, leaving you around $130. Now you are only ahead if you don't put anymore charges on your account and you are still responsible for the minimum monthly payment. Personally I would just pay the credit card off and put the money you would have put towards the credit card payment into savings. Saves a lot of headaches.
2006-07-30 18:04:33 · answer #2 · answered by sukditup 3 · 0⤊ 0⤋
This is not a big amount of money, so whether you pay it now or invest for the year you aren't going to reap big bucks.
However, if you are carrying any other high-interest debt, hold the 0% and pay that off instead.
2006-07-30 18:19:43 · answer #3 · answered by kevinngunn 3 · 0⤊ 0⤋
Since you have 12 months to pay off the balance with no interest; place funds into a Share Certificate or Certificate of deposit. Let it earn interest and pay off credit card prior to due date. You have the best of both worlds a free ride on the credit side and interest earned on your funds.
2006-07-30 18:20:19 · answer #4 · answered by John H 4 · 0⤊ 0⤋
invest in something VERY safe, like a CD, for 3-6 months (well before the 0% interest time is up), then pay it off...if you don't have it off before the time period is up, they'll backdate interest to day one, but there's no reason not to invest the money somewhere safe until then (NO STOCKS!!!!)
2006-07-30 19:31:35 · answer #5 · answered by Dwight D J 5 · 0⤊ 0⤋
Pay it off!! If you invest and lost the $$$ you end up by not being able to pay that small debt and ruin your credit score!!
2006-07-30 18:01:37 · answer #6 · answered by Antoine a 3 · 0⤊ 0⤋
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good luck!
2006-08-02 22:13:31 · answer #7 · answered by Anonymous · 0⤊ 0⤋
invest it in 13 month cd, you will get 5-6 percent
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2006-07-31 00:09:01 · answer #8 · answered by BIjan 2 · 0⤊ 0⤋