My Credit Union is running a promotion, that almost every financial institution runs at this time of year. I am trying to decide, if I should take them up on the offer.
The Credit Union is offering its membership the opportunity to help a good cause and to have some extra cash for the holiday season. ECU is providing the opportunity to skip your November, December or January loan payment with a $10 donation to support TARC.
TARC is a local nonprofit organization formed to help Topeka area residents with developmental disabilities. In order to qualify for Educational Credit Union’s Skip-A-Payment program, your loan must be in good standing. Interest will accrue on your account and will extend the term of your loan. You may only skip the payment on one of your ECU loans.
To skip your November, December or January loan payment, simply fill out the form below, and mail or drop it off at any ECU location. Mortgages, home equity lines of credit, and VISA credit card payments are NOT eligible. TARC is a nonprofit organization whose mission is to provide service, support, advocacy and community involvement for children and adults with developmental and related disabilities in Shawnee County.
Your donation is greatly appreciated and helps provide local residents with vital services. Visit TARC’s Winter Wonderland this holiday season. To volunteer with TARC or for more information log on to www.tarcinc.org
I see 2 issues here, one is pro and one is con:
1. If I do skip a months payment, it will set me back by $115-$120 in interest charges that will continue to accrue, during the month.
2. If I skip a month, I could apply that payment(about $400) towards my credit card, and get my credit card debt cut in about half. Which would make it easier, to attempt to reach my goal of having the card paid off by Dec. 31.
Everyone has an opinion, and I love hearing from you, while I may or may not disagree with you I find your thoughts interesting. I read every comment, however, I do delete the ones that I consider comment spam.
Am I stupid, for considering this option? Or is taking the skip a great idea?
Normally I'd say it's dumb to skip a payment, as you not only accrue interest for that month, but you're then paying extra interest on the larger balance (compared to what it would be if you hadn't skipped) next month, and the next,... until your loan is finally paid off in full. This can end up being a huge amount.
ReplyDeleteHowever, if you use the money you'd normally have paid to pay EXTRA off your credit card, and the card is at a higher interest rate, then the idea is OK.
Regards
http://enoughwealth.blogspot.com
If your CC interest rate is higher than your mortgage rate then it might make sense. You might also look into seeing if you can deduct the additional mortgage interest -- that sweetens the deal a little.
ReplyDeleteAlso, if you tack on an extra $10 per month to your mortgage payment for a year after you've killed the credit card, you've made up the ground you lost by skipping a payment.