- Discussion board

I just bought a new motorcycle and took a loan on it for $4700 from Household Finance with a 14.9% interest rate.

I have two credit cards with 9.9% interest rates. I am thinking about apllying for another 9.9% interest rate card and transfering my Motorocycle loan to the new 9.9% credit card.

My questions is does my Motorcycle Loan through Household work the same as a credit card loan in terms of how much finance charge I am charge each month?

It seems logical that 9.9% is cheaper than 14.9% but I don't know if the finance charges are figured in the same manner on a credit card versus the Household Loan.

Will I save money with this idea???

Assuming the two rates you are comparing are both in terms of APR, you will save money with the 9.9% ONLY if you make larger than minimum monthly payments and stick to the same term as the higher rate loan.

Example: If your higher rate loan is for a period of 4 years, than make sure you calculate your 9.9% monthly credit card payment to have the balance totally paid off in 4 years time or (preferably) LESS. The danger with a credit card loan is that you might keep charging and lowering your monthly payments so that you end up in debt for a long period of time.

And before you pay off that motorcycle loan, find out if there is a prepayment penalty.

The_Insider