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Yea I know im a dummy for not building my credit sooner. But I have always stayed away from credit cards in the past thinking they were evil and would get me into financial trouble. But now I realize how important it is to have some credit. Ill have to talk to a credit union(my parents belong to a good one, maybe they can get me in) and get a credit card soon.

So I guess its possible for me to finance a new bike with no credit history, but it'll mean a horrific interest rate. That doesnt sound very appealing. I really wanted a brand new bike so I could have something worry free, but oh well. Guess I should take the $1-2k I would have used on a down payment and buy an older bike with it. Good point about the insurance too.

Thanks everyone for the advice.

In some ways it is good that you waited to build your credit, because it sounds like your priority is maintaining it responsibly. Call around to the local universities and sign up for a personal finance class. Or a seminar. You will have to pay some money, but they are worth it IMO. There are many credit counseling services that can give you free advice on how to build good credit.

Chris8187 wrote:Why is it so bad to get a credit type loan for a motorcycle? It still builds your credit. I got 7.99% interest rate for 2 years for my motorcycle. I'd say that is a pretty good deal.

The main thing is that with a motorcycle, stuff HAPPENS!!! Either due to 'pilot error' or events beyond your control. And you can end up with no motorcycle, and still making payments on that several thousand dollar 'charge' for several years.

I've got a friend who walked out to his parked motorcycle just this past weekend, to find that it had been tipped over ON THE SIDESTAND SIDE! Lots of scratches and 'bruises,' possibly frame damage because of the muscle required to tip the bike over that way.

P

Ian522 wrote:Yea I know im a dummy for not building my credit sooner. But I have always stayed away from credit cards in the past thinking they were evil and would get me into financial trouble. But now I realize how important it is to have some credit. Ill have to talk to a credit union(my parents belong to a good one, maybe they can get me in) and get a credit card soon.

So I guess its possible for me to finance a new bike with no credit history, but it'll mean a horrific interest rate. That doesnt sound very appealing. I really wanted a brand new bike so I could have something worry free, but oh well. Guess I should take the $1-2k I would have used on a down payment and buy an older bike with it. Good point about the insurance too.

Thanks everyone for the advice.

I'm with you there. I just about never had a credit card. I think in college, I applied for 2, I used one of them to buy a magazine subscription. Then I paid it off and never used the card again I hate credit cards. Dad told me once, if you can't buy it with cash then you don't need it.

Anyway, when DH and I got married, his credit score jumped up


As for getting a loan, personally I'd go through a credit union first. The vehicles we've bought in the past we have financed with our bank for much much much better rate than any the dealership can provide.

To build your credit with a credit card, apply for one with a reasonable limit ($550, $1,000) and make purchases of gas, groceries, but pay the whole entire balance off each month. What the "building" benefit is that you show you can draw the credit and pay it back timely.

As for the 7.99% for 2 years - look at your agreement, and you will see that after the 2 years, your interest rate goes up. It may be as high as 25%. The pitfall is that they will "disclose" it as "tied to an index" - which means Prime + X%. Presently, Prime is 8.25%, and has held since June 2006. Be advised that it will go up before it goes down.

Credit unions are so regulated that none of our loan products (cards, loans, consumer loans) can be above 15%. That's national!

Without a great big monetary policy lesson, some of you may be too young to remember when Prime was in the teens during the late 80's.
Those late 70's economic conditions are happening again.

The other thing about the credit card is that compounding interest feature of a credit card. On the simple interst loan, it may SEEM like your payment is higher, but in the long run, you are paying less interest. Remember the credit card articles that do the math, showing if you only pay your minimum balance, it'll take you 15 year to pay it off.

Currently, we are offering a 7.00% interest rate for up to 72 months on 125% of the purchase price (sales tax, warranty, shipping). How can you beat that?? That's only $17.04 per $1,000 borrowed!

I go on! I'm sorry! I look at credit and answer these types of issues all day.

Well, if my plan works out, I will be paying only $90 dollars interest for financing my bike through credit cards. All I got to do is pay the $8,000 back in one year starting in December. This is all through credit cards, but my parents are helping because I couldn't get this certain credit card by myself.

Deal is 0% apr for 12 months on purchases and balance transfers, so I'm taking it. I live at home and make atleast $11,000 a year, so I feel I should be good. I can also put that $8,000 into a saving account until the 12 months are basically up to make me some interest.

I also looked at the agreement, and the interest rate goes to 10.75% after 2 years are up. They are hoping someone pays them late. Once you pay late, the interest bounces into the 20s, which would kill. I also have full coverage in case something goes horribly wrong with my motorcycle.

Totally off topic Candy (well kinda) but since you are in the business I am curious. I heard recently about a top rate that anyone can charge interest on a loan of any kind. But credit cards found a loophole allowing them to charge 20-30%, by housing their offices in some specific cities that exempt the law. Something like that

The gist of it was that I can be charged 20% interest by my credit card company, but if I give a loan to my neighbor its illegal for me to charge him 20%.

Chris8187 wrote:Well, if my plan works out, I will be paying only $90 dollars interest for financing my bike through credit cards. All I got to do is pay the $8,000 back in one year starting in December. This is all through credit cards, but my parents are helping because I couldn't get this certain credit card by myself.

Deal is 0% apr for 12 months on purchases and balance transfers, so I'm taking it. I live at home and make atleast $11,000 a year, so I feel I should be good. I can also put that $8,000 into a saving account until the 12 months are basically up to make me some interest.

I also looked at the agreement, and the interest rate goes to 10.75% after 2 years are up. They are hoping someone pays them late. Once you pay late, the interest bounces into the 20s, which would kill. I also have full coverage in case something goes horribly wrong with my motorcycle.

Sorry for double posting. Check to make sure that your interest isn't deferred. In other words, you have 0% interest for 12 months but if the balance isn't paid in full you are charged full interest at your new rate for those 12 months. Also any purchases you make after the 12 months will be charged to your card at the regular rate. HOWEVER, as soon as you do that the 10% interest charge will fall to the back end of the card balance. So if you have $5,000 in 0% on the card and buy a $100 TV at 10%, you are going to be paying 10% on that $100 until the $5,000 is paid in full.

In other words, if you get this card...divide your balance by 12 and pay that each month. As soon as you get the card in the mail, cut it up. Treat it like a loan, and take advantage of the deal they are offering you. Otherwise its no deal and you should go with a traditional loan.

Candy might be able to answer: is this deal really 0% or is it 0% above prime?

PS: Candy, where the heck is your credit union and what FICO score do your customers need to qualify for that good loan?

I am in beautiful downtown Schenectady, NY, right behind the famous Proctor's Theater. All you need to do is work, live, volunteer, or worship in our 5 county area (Schenectady, Rensselaer, Saratoga, Montgomery and Schoharie), be employed by one of our Community Business Partners, or be related to someone who is elligible for membership.

I will guess at least 700.

Banks and credit unions can't charge a "usury" rate of interest. For credit unions, the NCUA has capped the chargable rate at 15%. For a bank, the OCC measures it more as a survey of the local area - and is most concerned that the lender does not charge one rate in this economic area, and a different rate in a lower economic area...but I think for a bank, it might be 16%-18% boarders on "usury". I have been out of "bank" for over a year....

You could probably charge your neighbor or relative whatever interest rate you want to becasue you aren't chartered as a lender.

Credit card companies are different - it has alot to do with competition what they will charge. This is why most banks have sold their portfolios, and offer a card with their logo through MBNA or similar.

A credit card company can increase your rate simply becasue they feel their costs have increased. I had a card that had a 6.99% rate when I got it, and suddenly, a few months later, it creeped up to 12.99%. I called and asked what happened. They said their costs increased. I was never late... they merely have to notify you.

We have a "default" rate noted in our loan documents. If a payment is late, we can increase the rate.

The usury rate thing is really about predatory lending.

Credit cards are not regulated as banks and credit unions are. Credit cards are regulated like "consumer products". Exactly how and why is more toward their organization and what they do. Banks and credit unions are either state, national, or both chartered. Credit card companies aren't. Most are companies incorporated in Delaware.

When a rate is disclosed as 0%, it is usually 0%. If it is Prime Plus 0% or Prime, you get the rate as published.

And that is the best way to handle those 0% options! If you can pay it off in the promo period, you win. Plus, you are building your credit by drwaing off then paying back. Just make sure that is they give you a "minimum" payment in the promp period, you make it. I got a 0% for 18 months on my laser vision correction, and have been paying it a few hundred per month. My work mate got the same, and failed to make the minimum monthly payment. She got lates on her credit report, they ended her promo, and they increased her rate of interest.

Oh - PS - regarding your FICO and insurance... In today's market, your FICO will influence your insurance rate.

I guess the studie show correlations between bad credit and lots of claims.