Are 'no interest if paid in in x months' credit cards worth it?
You can't buy it outright. You can't take the time to save up. if the remaining choice is between a card that charges from day one, and a card with this kind of grace period, the grace card is the better choice. Plan wisely, pay it in full before that rate starts to be charged. One additional note - There are two groups of people, the pay-in-fullers and the balance carriers. I believe that one should pay in full, and never pay interest.  A zero rate offer can be used by the balance carrier to feel great for 12 months, but have even more debt after the rate kicks in.  As a pay-in-full user, I've used the zero rate to throw $20K at the 5.25% mortgage, and planned a refinance to 3.5% just as it ended. a $750 savings (after the tax effect) well worth the bit of effort.  The fees should be in the fine print. My zero rate had a transfer fee, $50 max, which was nothing in comparison to the savings. "It has been reported in consumer media (for example Clark Howard's radio program) that the ""no interest for 12 months"" contracts could trick you with the terms and the dates on the contract. Just as an example: You borrow $1000 on 12/1/2013, same as cash for 12 months.  The contract will state the due date very clearly as 12/1/2014.  BUT they statements you get will take payment on the 15th of each month. So you will dutifully pay your statements as they come in, but when you pay the final statement on 12/15/2014, you are actually 14 days late, have violated the terms, and you now owe all the interest that accumulated (and it wasn't a favorable rate). That doesn't happen all the time.  Not all contracts are written that way.  But you better read your agreement. Some companies use the same as cash deal because they want to move product. Some do it because they want to trick you with financing.  Bottom line is, you better read the contract." "I too am a full-monthly-statement-balance payer and I received a balance transfer offer from my credit-card company. This one was quite different from many others that I have read about on this forum. I could do a balance transfer for any amount up to $X from another credit card, or use the enclosed ""checks"" to pay  some other (non-credit-card) bills, and I would not have to pay any interest for 12 months on the amount thus borrowed.  But, There would be a 2% service charge on the amount I was borrowing. This amount would be billed on the next monthly statement, and it would have to be paid in full by the due date of that month's payment, that is, within the 25-day grace period allowed for payment of monthly statements. Else, interest would start being charged on the unpaid part of the service charge at the usual humongous rate of H% per month. If I had not paid the previous month's balance in full, I would be charged interest at H% per month on the service charge starting from Day One; no free ride till the due date of the next month's statement. Of course, the balance carried over from last month would also be charged interest at H%. If I had paid last month's bill in full, but there were any other charges (purchases) during the current month, then  unless the entire amount due, this month's purchases plus service charge and that ""interest-free-for-twelve-months loan""  balance was paid off within the 25-day grace period, my purchases would be deemed unpaid and would start being charged interest. In short, the only way to avoid paying interest on the amount borrowed was to start with a card showing a $0 balance due on the previous month's statement, not make any charges on that card for a whole year, and pay off that 2% service charge within the grace period. It might also have required that one-twelfth of that interest-free loan be repaid each month, but  I had stopped reading the offer at this point and filed it in the round circular file. In short, while @JoeTaxpayer's tale of how ""As a pay-in-full user, I've used the zero rate to throw $20K at the 5.25% mortgage"" is undoubtedly how things worked once, it is not at all clear that they still work that way. At least, they don't work that way for me.  Heck, once upon a time, for a period of about 3 months, you could earn 1.5% interest per month from the credit card company by overpaying your credit card bill considerably. Their computers then just ""added on"" 1.5% interest by multiplying your credit balance -$X by 1.015 and so you got 1.5% per month interest from the credit card company. The credit card agreements (and the software!) got changed in a hurry, and nowdays all credit-card agreements state in the fine print that if you overpay your bill, you don't earn any interest on the overpayment." No, because of the balance transfer fees, which could be 4%. Unless of course you get a deal for 12 months of no payment, and you pay it back in 12 months, in which case a 4% annual interest rate is much less than a loan! At that point you are gambling that you will be responsible with the payments, and the card company is taking the opposite bet.
I'm in the US, and I can't speak for all credit cards, but I have done this in the past. I've paid extra on my credit card, and had a positive balance on my credit card account. The purchases made after paying extra were applied to the balance, and if there was money left over on the statement closing date, I didn't owe anything that month.  Of course, I didn't incur any interest charges, but I never pay interest anyway, as I always pay my statement in full each month and never take a cash advance on my credit card.  You could call your credit card company and ask them what will happen, or if you are feeling adventurous, you could just send them some extra money and see what happens. Most likely, they will just apply it to your account and give you a positive balance. I tried this a few months ago when I got one from Chase for 0%.  Thought it might be fun to play with, maybe make some money with the interest elsewhere over the 6 months.  Read the term and called Chase for more information on these and didn't see any issues at first.   The big thing that got me was that the rest of my account (not the money from the convenience check) was converted so that interests accrued on a daily basis even if you paid it all off at the end of the month.  So even though I was making the required payments that would normally not incur any interest, just by having the convince check balance on my account I was being charged the interest for my normal credit card charges over the month.   The amount of charges came out to only be around $10-$20, so wasn't much of a loss really.  But something to keep in mind when using these, (I tried it with 0% APR and still couldn't get away from the interest).  If I had needed the money this would still be an excellent way to go.  But if your trying to beat Chase with this game, it doesn't work...  Although if you don't use the card for anything other than the convenience check it's free money (or cheap @ 3.99% in your case) Everything in my account went back to normal after it was paid off, so no harm really, but some things to keep in mind at least. "Stop spending on the CC with the revolving balance.   After the discussion below I feel I should clarify that what I am advocating is that you make your ""prepayment"" (though I disagree with calling it that) to the existing CC.  Then, rather than spending on that card, spend somewhere else so you won't accrue any interest related to your spending.  At the end of the month, send any excess to the account that has a balance.  This question is no different than I have $X of cash, should I let it sit in a savings account or should I send it to my CC balance?  Yes, 100%, you should send this $750 to your CC balance.  Then, stop spending on that CC and move your daily spending to cash or some other place that won't accrue interest at all. The first step to paying off debt is to stop adding to the balance that accrues interest.  It's not worth the energy to determine the change in the velocity of paydown by paying more frequently when you could simply spend on a separate card that doesn't accrue any interest because you pay the entire balance every month. The reason something like this may be advisable on a HELOC but not a CC is the interest rate.  A HELOC might run you 4% or 5% while your CC is probably closer to 17%.  In one situation your monthly interest is 0.4% and in the other your monthly interest is 1.4%.  The velocity of interest accrual at CC rates is just too high to justify ever putting regular spending on top of an existing revolving balance.  Additionally, I doubt there is anyone who is advocating for anyone to charge their HELOC for daily spending.  You would move daily spending to somewhere that isn't accruing interest no matter what.  You would use a HELOC to pay down your CC debt in a lump or make a large purchase in a lump.  Your morning coffee should never be spent in a way that will accrue interest immediately, ever. Stop spending on the CC(s) that are carrying a balance. (period) Generally credit cards have a grace period before interest is charged.  As long as a balance isn't carried from one statement period to the next you maintain your grace period.  If you spend $100 in the first month you have your card, say the period is January 1 to January 31, you'll get a statement saying you owe $100 for January and payment is due by Feb 28.  If you pay your $100 statement balance before February 28 you won't pay any interest, even if you charged an additional $500 on February 15; you'll simply get your February statement indicating your statement balance is $500 and payment is due by March 31, still no interest.  BUT.  If you pay $99 for January, leaving just a single dollar to roll over, you now owe interest on your entire average daily balance.  So now you'll receive your February statement indicating $501 + interest on approximately $233.14 of average daily balance ($1 carried + $500 charged on Feb 15) due by March 31.  That $1 you let roll over just cost you $3.26 in interest ($233.14 * 0.014).  AND.  Now that balance is continuing to accrue interest in the month of March until the day you make a payment.  It typically takes two consecutive months of payment-in-full before the grace period is restored. There is no sense in continuing to spend on a CC that is carrying a balance and accruing interest even if you intend to pay all of your current month spending entirely.  You can avoid 100% of the interest related to your regular spending by simply using a different card, and no rewards will beat the interest you're charged." Your plan isn't bad, but it probably isn't worth the cost for the small amount of credit building it will achieve. If you do decide to continue with it though, you'll save in interest if you make the big payment now rather than in 6 months. In other words, you can take the minimum payment, multiply it by 5, subtract that amount from the total you owe and pay the difference immediately. This way you'll still get the 6 months of reporting to the credit bureaus, but you'll pay less interest since you'll have less principle each month. I would recommend applying for the credit card right now. I believe you'll probably get approved now. If you do, then pay off the car loan without thinking about it. (If you don't get approved, think about it, then probably still pay it off.) Regarding the full coverage insurance, even after the loan is paid off and you aren't required to have it, you may still want to keep it. Even if you're the best driver on earth, if someone hits you and doesn't have insurance, or they have insurance and drive off, or a deer runs in front of you, etc, you'll lose your car and won't be reimbursed. Also, as Russell pointed out in the comments below, without collision coverage your insurance company has no incentive to work on your behalf when someone else hits you, so even if it's not your fault you may still not get reimbursed. So, I wouldn't pass on the full coverage unless your car isn't worth very much or you can stomach losing it if something happens. Good luck, and congrats on being able to pay for a car in full at 19 years old. "There are always little tricks you can play with your credit card. For example, the due date of your statement balance is not really set in stone as your bank would like you to believe. Banks have a TOS where they can make you liable to pay interest from the statement generation date (which is a good 25 days before your due date) on your balance, if you don't pay off your balance by your due date. However, you can choose to not pay your balance by your due date upto 30 days and they will not report your late payment to credit agencies. If they ask you to pay interest, you can negotiate yourself out of it as well (although not sure if it will work every-time if you make it a habit!) Be careful though: not all banks report your credit utilization based on your statement balance! DCU for example, reports your credit utilization based on your end-of-the-month balance. This can affect your short term credit score (history?) and mess around with your chances of pulling off these tricks with the bank CSRs. These ""little tricks"" can effectively net you more than 60 days of interest free loans, but I am not sure if anyone will condone this as a habit, especially on this website :-)" I think it depends on how you're approaching paying off the credit card. If you're doing some sort of debt snowball and/or throw all available cash at the card, it's not likely to matter much. If you're paying a set amount close to the minimum each month then you're probably better off getting a loan, use it to pay off the card and cut up the card. Well, I'd do the latter in either case... Mathematically it would matter if the interest rate on the card is 10%-15% higher than the personal loan but if you're throwing every spare dime at the card and the some, it might not matter. Another option if you have the discipline to pay the debt off quickly is to see if you can find a card with a cheap balance transfer, move the balance over and close the inflexible card. The difference in interest is not a huge factor in your decision.  It's about $2 per month.   Personally I would go ahead and knock one out since it's one less to worry about.  Then I would cancel the account and cut that card up so you are not tempted to use it again. To address the comments... Cutting up the card is NOT the ultimate solution.  The solution is to stop borrowing money... Get on a strict budget, live on less than what you bring home, and throw everything you can at this high-interest debt.   The destroying of the card is partly symbolic - it's a gesture to indicate that you're not going to use credit cards at all, or at least until they can be used responsibly, not paying a DIME of interest.  It's analogous to a recovering alcoholic pouring out bottles of booze.  Sure you can easily get more, but it's a commitment to changing your attitude and behavior. Yes leaving the card open will reduce utilization and improve (or not hurt) credit score - but if the goal is to stop borrowing money and pay off the other card, then once that is achieved, your credit score will be significantly improved, and the cancelling of the first card will not matter.  The card (really both cards) should never, ever be used again. "I think this stuff was more valid when grace periods were longer. For example, back in the 90's, I had an MBNA card with a 35 day grace period. Many business travellers used Diner's Club charge cards because they featured a 60 day grace period. There are valid uses for this: As JoeTaxpayer stated, if you are benefiting from ""tricks"" like this, you probably have other problems that you probably ought to deal with."