Loan Borrowing and Credit Card Balance Transfer

vindator on 12/07/2023 - 14:52
Last edited 12/07/2023 - 15:09 by 1 other user

I have a new car which I need to settle in September (2 more months), need additional $50k cash.

I have the following thoughts, currently I have a Citibank premier card with a $57k credit limit. Citibank premier offers a 5.9% 5 years initial balance withdrawal which I could use to borrow the $50k at 5.9% interest rate.

I am thinking once I take up the initial balance withdrawal of $50k, I would cancel this Citibank credit card/reduce limit and reapply for Citibank clear card which offers a balance transfer of 0% up to 28 months.

Am I allowed to do this or does anyone have better idea what I can do to reduce interest rate to get $50k?

PS: Most cash assets sitting aside but mostly sitting at crypto/shares which I don't plan to liquidate.

• 

  randomusername2017 on 12/07/2023 - 15:05

  +1

  i would cancel of this citibank credit card

  If you have the funds on hand to close out the account before opening a new one.. why not just pay cash for the car?

  Unlikely to be able to balance transfer between products at the same bank.

  Your next card will need +10-20% limit to accommodate the transfer, make sure you appear to have the capacity to service 100k CC debt.

• 

  Drakesy on 12/07/2023 - 16:03

  +1

  Geezus, if this is the state of some people in the Australian economy right now then the recession has already arrived.

• 

  donga100 on 12/07/2023 - 16:48

  Assuming you are in the 37% income tax bracket based on needing an "additional" $50k cash for the car on top of what you cash you have already for it I am going to say it makes very little sense for you to borrow the $50k on a credit card or any other loan compared to liquidating your investments. Any returns you make from your crypto and shares will lose 39% (37% income tax + 2% Medicare levy) so you would need to be expecting to make more than 9.67% per annum ROI on those investments to be better off than the 5.9% interest you are paying on the borrowed amount. If you really think your investments are going to perform that well you would still be better of selling them to pay for the car and then repurchase them using a margin lending loan as the interest on that loan would be tax deductible.

  • 

    Drakesy on 12/07/2023 - 16:50

    BuT BiTCoiN ToO tHe MOon