A friend of mine bought a house with a credit card (it cost less than $30,000). She said she did this because her credit card was at a fixed rate of 2.99% for the life of the balance. I have never heard of anyone doing this before. I thought credit cards accrue interest differently than loans do, and I think she made a huge mistake. Maybe I'm wrong, but please let me know if you know anything about credit card or loan interest and how it is incurred.
2007-09-03 07:26:24 · 3 answers · asked by nsupanda82 3 in Business & Finance ➔ Personal Finance
If the interest rate is really 2.99 percent, then that's very low and it was a good idea. She should look at the interest that they charge her, and calculate that it is at that rate.
Mortgage interest is tax deductible, while credit card interest is not, so she is losing out on a small tax deduction, but I think her rate is so low that she is better off with the deal that she used.
Most mortgage loans require monthly payments of interest plus some principle. I hope that she chooses to pay some principle every month.
2007-09-03 07:47:54 · answer #1 · answered by hottotrot1_usa 7 · 0⤊ 0⤋
Credit cards usually have a very high rate of interest. 2.99% sounds amazingly low.
2007-09-03 14:37:21 · answer #2 · answered by Mike D. 3 · 0⤊ 1⤋
The only difference is how you pay it. The rules are different but the math is the same. 2.99 On a cc I would have done it too.
2007-09-03 14:59:53 · answer #3 · answered by Dan S 4 · 0⤊ 0⤋