Direct Sales Financing

[EM Lawrence]

Has anyone ever put the entire purchase of a direct contract onto their Disney Visa and paid part of it off during the 6 months interest free period, and then transferred the remaining balance to a new credit card with an 18-21 month interest free offer for transferred balances?

I know there would be balance transfer fees on both sides of this transaction. But could it still make sense? What are the pitfalls to this that I am not thinking of?

 

[Lorana]

Downsides that I can see:

(1) you’ll pay a balance transfer fee of 2% to 4% on most cards
(2) your existing credit cards may not have a 0% financing offer available when you need to transfer
(3) you might not get approved for a new credit card with a high enough balance
(4) it will be another inquiry on your credit report. Though if you were going to finance, this isn’t a big deal
(5) Be mindful of how much balance you are carrying on your credit cards as they affect your credit score more so than a loan (this is true regardless of whether or not you transfer the balance to another credit card. Admittedly opening a new CC may help this as your total available credit would increase).

 

[coasternut22]

I'm in the same boat. I can pretty much guarantee that in January, my Navy Federal Credit card will offer a 0 balance fee transfer with a 1.9% 12-month rate thereafter. We've done this the past 5 years for regular purchases. So I'm not too worried six months from now. I'd like the 0% for six months from Disney, then this rate for the remainder.

My question to others, is that I read somewhere that you can only charge $10,000 per "swipe" therefore you had to to pay over different credit card cycles. Can someone explain this?

Thanks

 

[Frederic Civish]

Has anyone ever put the entire purchase of a direct contract onto their Disney Visa and paid part of it off during the 6 months interest free period, and then transferred the remaining balance to a new credit card with an 18-21 month interest free offer for transferred balances?

I know there would be balance transfer fees on both sides of this transaction. But could it still make sense? What are the pitfalls to this that I am not thinking of?

Actually, I did exactly this. But it was with different cards and on a resales contract. After I transferred to the interest free credit cards, which I already had, I took another 10 months to pay them off. It was a 'feat' but it worked. I also have bought direct where I paid for half, and financed the other half (through Disney), and also paid that off over the next year and a half.

It is true that WHEN THEY HAVE THEIR SPECIAL DEALS (which are not always available) you do pay 2% to 4% up front to pull a large amount of money out of a credit card, but that is a bargain price for interest, as long as you finish paying it off within the next 10 or 11 months, or whatever the payment period is.

 

[4luv2cdisney]

Has anyone ever put the entire purchase of a direct contract onto their Disney Visa and paid part of it off during the 6 months interest free period, and then transferred the remaining balance to a new credit card with an 18-21 month interest free offer for transferred balances?

I know there would be balance transfer fees on both sides of this transaction. But could it still make sense? What are the pitfalls to this that I am not thinking of?

What do you mean transfer fees on both sides? There should only be one fee.

 

[EM Lawrence]

I’ve never actually transferred a CC balance, but I thought that the CC losing the balance and the CC gaining the balance both charged a fee? Is that incorrect? If so, that is even better for my strategy!

 

[heynowirv]

My understanding about resale was you may use CC for deposit but not for the actual purchase.

 

[EM Lawrence]

That is correct for resale. But direct will let you put the whole thing on your Disney Visa, which I already have. Then it is interest free for 6 months. I don’t think I could pay off a direct purchase completely in 6 months, but I could transfer the remaining balance to another credit card with 18 months no interest on balance transfers. Then it would be easy to pay off, with the only cost for the use of that money being the balance transfer fees. Since I’ve never made a big purchase this way, I’m curious what the unforeseen pitfalls are. But so far, nobody has suggested any that I think would be a dealbreaker.

The only problem I can see would be if I can’t get a zero interest offer when I need it. But in that case, I can just turn the balance into a self-financed loan at the 6 month mark and pay myself the interest.

 

[heynowirv]

Actually, I did exactly this. But it was with different cards and on a resales contract. After I transferred to the interest free credit cards, which I already had, I took another 10 months to pay them off. It was a 'feat' but it worked. I also have bought direct where I paid for half, and financed the other half (through Disney), and also paid that off over the next year and a half.

It is true that WHEN THEY HAVE THEIR SPECIAL DEALS (which are not always available) you do pay 2% to 4% up front to pull a large amount of money out of a credit card, but that is a bargain price for interest, as long as you finish paying it off within the next 10 or 11 months, or whatever the payment period is.

I didn't think you could use a CC for resale purchase.

 

[becauseimnew]

That is correct for resale. But direct will let you put the whole thing on your Disney Visa, which I already have. Then it is interest free for 6 months. I don’t think I could pay off a direct purchase completely in 6 months, but I could transfer the remaining balance to another credit card with 18 months no interest on balance transfers. Then it would be easy to pay off, with the only cost for the use of that money being the balance transfer fees. Since I’ve never made a big purchase this way, I’m curious what the unforeseen pitfalls are. But so far, nobody has suggested any that I think would be a dealbreaker.

The only problem I can see would be if I can’t get a zero interest offer when I need it. But in that case, I can just turn the balance into a self-financed loan at the 6 month mark and pay myself the interest.

That’s totally doable. I’ve also read that you can make 3 payments to pay for your direct purchase therefore you would get 6 months on each payment.

 

[jlb727]

We have financed large purchases this way (though not DVC). It sounds really doable! However I know you know this, but I would make triple sure you can pay off in the 18 months before the zero percent ends on the credit card or you have some kind of other safety net (borrow from family, etc) in case something happens. Many people don’t pay it off and that’s how banks make their money on those zero percent interest cards. They will charge you 25 percent interest (or whatever) on the original balance amount if you don’t or can’t pay it off before the special financing term ends. Good luck!

 

[EM Lawrence]

We have financed large purchases this way (though not DVC). It sounds really doable! However I know you know this, but I would make triple sure you can pay off in the 18 months before the zero percent ends on the credit card or you have some kind of other safety net (borrow from family, etc) in case something happens. Many people don’t pay it off and that’s how banks make their money on those zero percent interest cards. They will charge you 25 percent interest (or whatever) on the original balance amount if you don’t or can’t pay it off before the special financing term ends. Good luck!

Yes, that is great advice! We always pay CC off every month. I’m very disciplined about it. But if you are not, you are playing with fire. Also great advice about the backup plan just in case!

 

[EM Lawrence]

I didn't think you could use a CC for resale purchase.

Lots of CC will send you “checks” that you can deposit into your bank as cash. It is then converted into money you could use to pay for a resale contract, and you then pay the CC back under whatever terms you agreed to.

 

[heynowirv]

Lots of CC will send you “checks” that you can deposit into your bank as cash. It is then converted into money you could use to pay for a resale contract, and you then pay the CC back under whatever terms you agreed to.

Gotcha ,thru the backdoor. So do you still get the perks that CC's give as if it was a purchase?

 

[Lorana]

Gotcha ,thru the backdoor. So do you still get the perks that CC's give as if it was a purchase?

Not with a balance transfer.

 

[heynowirv]

Not with a balance transfer.

Not worth it,,, have cash will buy.

 

[4luv2cdisney]

I’ve never actually transferred a CC balance, but I thought that the CC losing the balance and the CC gaining the balance both charged a fee? Is that incorrect? If so, that is even better for my strategy!

That's never happened to me.

Also, as you know, they often just send you checks for a transfer. So, it's no different than just making a regular payment.

 

[Frederic Civish]

I didn't think you could use a CC for resale purchase.

That is why I said it was with different cards. One card gave 'Introductory' interest free purchases for 6 months and other cards gave the Cash Advance at 3% or 4% for 12 months or so.

 

[zakdavid]

I did this. I put it on the Disney visa and kept it there for 5 months and then transferred to my existing discover card. They gave me a 0% APR for 15 month offer with a 3% transfer fee. So I paid the 3% fee and paid off the card in that 15 months. Worked out to I paid 3% "interest" on the loan which I was happy with