Financing equipment with a credit card?

Yes, I do. That's why I have $180,000 available on credit cards, and paid off a 2 bedroom condo at age 27. Because I know how the system works.[/QUOTE]

I'm not saying or implying that you don't have it togather, nor am I saying that it can't be done. I would think long and hard about this you have paid off a nice place to live and acquired 180000 dollars of available credit so you have been ding something right. To say lets leave the repair out of this it goes in another thread is being a tad bit blind, thats part of truck ownership and contributes to paying it off early. To proper upkeep a 35000 dollar truck and still pay all 35000 off in less than a year even with few bills is a high gamble at best. No one likes to think about it but that much credit in this business is dangerous, things don't go as planned but pride and determination refuse to let us quit as human beings and next thing you know there is a hole impossible to dig out of. Again I'm not being negative just thinking what ever you have been doing even if its a company driver position obviously works for you why mess with sucess.

 

Personally I don't think it's a bad idea. Chances are you are not going to find better financing being a first time truck buyer. If you can be diligent and pay it everymonth like a normal truck payment instead of a minimum payment then it will work. Especially if you do have that kinda of credit available after the purchase of the equipment. I would not get hung up on your credit taking a hit. Credit scores go up and down every month. Your credit score will go down if you don't use the credit cards. If you don't use the credit then how do creditors know that you can manage credit. Also, everybody seems to be assuming you have 0 cash. Maybe I read the post to quickly, but maybe he is hoarding his cash. Cash is king. Just because you have a chunk of cash doesn't mean you should use it towards buying a truck. One thing I would think a little bit about is trying to get future loans. If you want to apply for another truck in the future banks usually like to see prior history of having finaced one the normal route in order to get a low rate. My vote would be to still go for it. If this is your option to "get your foot in the door" then go for it. I have seen try far riskier ventures with not nearly as much backing.

 

i'm surprised anyone has that much credit these days. with the bank melt down. lot of people lost some of their cards and had others reduced on their limits. all done by the banks.

but then, if i had that much credit available to me. i must have a really GOOD paying job. i certainly wouldn't give it up for trucking. that be like a cut in pay.

nice idea. but like others have said. a truck and trailer that cheap. usually come with repairs down the road. and truck shops and parts, AREN'T cheap.

 

Ft. Been there. You have so much fun ahead of you.

 

Thats HOW you do it!!! That is how I financed my very first truck.

 

It can be done. However, I would have a plan B before using those cards. There can be pitfalls to using credit cards to make such large purchases. I prefer to plan for the worst that can happen. For instance, if the economy goes in the toilet again in the next 12 months, would you still be able to make those high payments? Never, ever plan on the best that can happen. Because, the best scenario rarely happens. I would plan on what you can do should you not do as well as you expect and be able to pay off the credit cards as planned. I have no doubt that you can buy a truck and trailer with your credit cards. But, if your credit is that good, you may want to consider conventional financing. You may be able to get a low interest line of credit or commercial loan to buy your equipment. Ultimately, it is your choice. If you feel confident in buying your equipment in this manner then go for it. As I stated, I would have a contingency plan in case you can't pay it off at the end of the 0% interest rate. The last equipment that I financed I had a rate of around 7% or less. It has been several years ago since I have had any payments. At the time most were doing good to get a 13% interest rate. I would encourage you to establish a commercial line of credit, whether you use it now or not. You are only charged interest on the length of time you use the money.

 

Assuming you are savvy with money and business plans, the above quote from Gman is definitely worth your consideration. Even if you are able to finance yourself through the creative use of credit cards, if you stick around trucking long enough, eventually you will probably wish you had a commercial loan somewhere on your credit history. When I got into trucking 4.5 years ago I had a 800+ credit score and still had to pay about 13% interest for my first used truck because I had no commercial loan history. It was a 3.5 year loan and I paid it off in 18 months because I felt like someone was robbing me every time I made a payment. Now my truck is paid for and I just wrote a deal on a brand new Utility trailer for 29k yesterday. I came very close to financing it exactly the way you are describing. I had 3 of 4 dealers in town tell me that I could use credit cards for the entire purchase but that they would charge me anywhere from 3-4% extra because of the fees they would incur for the credit card (even though I know it only costs them about 2%). All the quotes on financing from the dealers (most of which were from G.E. Capital) came in at about 8.95% even with my excellent payment history on my first tractor loan. I was ready to do the credit card thing until I sent an application in on my own to Trans Advantage (United Van Lines finance Department). They hooked me up with a 6.5% TRAC lease with a $100 residual at the end (I do not drive for them). Because I live in Arizona I do not have to pay sales tax on the TRAC lease (just on the $100 residual at the end to complete the "purchase"). If I would have used my credit card power to purchase, I would have had to pay 8.3% sales tax on the sale.

All this to say: just keep figuring all the angles you can and listen to different opinions on this forum. If you really know what you are doing there is nothing wrong with financing yourself with the creative use of credit cards. Is it risky? Of course it is... but so is a regular commercial loan for 13-30%!

 

Whatever you decide to do, I would have a contingency plan if you decide to move ahead with using your credit cards. When the recession hit, many people with excellent credit had their credit lines cut and credit card limits lowered and/or closed. It had nothing to do with the debtor, but the banks who got into trouble. The economy is still shaky and I think we could be in for yet another downturn. If that happens, those with lines of credit and credit cards could have their credit cut or eliminated. You need to prepare for that contingency. It may or may not happen, but if you are prepared you know better how to deal with something. One question that I would ask you is if you had all of your credit card lines cut, would you be able to survive in a down economy? Would you be able to grow and prosper without the credit? I don't say this to discourage you but for you to understand that credit can be cut without notice and that can wreak havoc with your business and credit score. When lines are cut it can lower your credit score an access to additional credit. It is ALWAYS good to have a survival plan.