The difference is that CC provide you x days of interest free loan thus you will sure gain even with 1% interest.

Loan on the other hand, cost you money every day.

So if one is rich enough, can one actually use a credit card to buy a car?

It is different with credit card, as credit card got 21 days interest free, loan doesn't.

Take HP is about improve your cashflow, not to earn interest.

Instead spend lump sum 50K into car, you have extra cash in hand, that can be used upon on other purposes. It is not to "earn" interest in FD.

If count to details, one is always better off with lump sum 50k pay in cash and no loan. No FD can win against loan interest one.
But when any contingency issue arised, you have no money which you may face cashflow problem, that's where you need a HP even though have money to pay off by cash.

How about buying a car with a credit card? Is that possible?

well you could actually tag me lol..yea...i think my concept is simple and generally use for many. like what Bonescythe said, it is unfair comparison and it's not effective. im starting to grasp the whole concept.

1. Car company won't accept credit card payment (may be except downpayment which I don't quite sure about it).
Imagine bank charge 2% on the payment, 50K x 2% = 1k, Car company earn less 1K.

2. You need to clear the credit card loan by 21 days, if not interest charging on your outstanding, which can up to double digit. You can only "earn" 21 days, then need to clear off the outstanding amount.

only if your dealer allows it. Mostly not

1. There is a difference between interest on a loan calculated on a flat-rate basis and the interest rate of a fixed deposit - which is also known as the 'effective interest rate'.

To compare apple to apple, the flat-rate interest must be converted first... using online calculators... http://loanstreet.com.my/calculator/flat-t...rest-calculator.

The 3% flat-rate interest over 5 years, is actually 5.64%.

So the short answer is: Since the interest rate of the loan (5.64%) is higher than the fd (4.2%), it is more 'profitable' to pay cash than taking a loan and put the money in fd.

2. Why is there a difference? Just imagine that the fixed deposit is a loan to the bank. With this fd loan, the bank has the full usage of the 50k over 5 years... while in the car loan, we don't have the full usage of the 50k over 5 years, since we are paying installments every month.

Yea possible..

Most allow booking fee only... 10% downpayment also cannot.
some cap at 10k only.

the rest of it.. charge u 2%..

unless ur car is 5k... Then maybe ok..

What do you mean the rest of it? The remainder of the xdr price, the dealer will charge you 2%?

Lets say car 100k.

Credit card swipe 100k..

10k no charge u 2%

90k charge u 2%



If u pandai, then u start to play with balance transfer.. and keep BT BT BT for 0%

This post has been edited by Bonescythe: May 7 2015, 05:08 PM

Down payment maybe can, if they have apply for the terminal. So far I never see 1, at least in Seremban confirmed don't have.
Paying installment sure cannot.

Hi, reviving a very old thread.

Is this referring to opportunity cost over time?

Why do you reviving old thread?