So the dealership financed my bike by putting it on a Yamaha-branded HSBC credit card. Now that the bike's paid off, is there any advantage to keeping it, or should I just go ahead and cancel it? I wouldn't think so, but I'm mostly a noob in the money department. It's got some horrendous rate for non-promo items.
Advantage of keeping it: Credit score may be a few points higher, shows other creditors that you have other acct's open, and your debt to available credit ratio will be better(creditors like this), not to be confused with debt to income ratio.
Disadvantages: annual fees if applicable, having an open credit account that burns a hole in your pocket, 1 more statement that an ID thief could get their hands on, and some creditors may look at the acct. as potential debt(meaning if you go out and try and get a mortgage or a new car, some creditors may say, well if we give him the loan and then he goes and maxes out the Yamaha card, he may not be able to fulfill his obligation to us).
I've been through this on 3 different bikes(1 Yamaha and 2 Kaws) and all 3 were 0% for 6mo. I also did this with Best Buy with a 0% for 36mo. All of the above use HSBC-Retail Svcs and if I remember correctly, my payments went to Carol Stream, IL. I never had an issue on any of the 3 bike purchases. All were paid in full before the 6mo term limits and all 3 cards were deactivated after 2-3yrs of inactivity. I don't recall my credit score ever going down from the deactivations and I monitor my credit monthly.
However, I found it odd that towards the end of the 36mo term with the Best Buy/HSBC card, they failed to send me a monthly statement on 2 different occasions. It didn't really matter much to me because I make sure my payments are made regardless of a statement, but it could've been disasterous. The initial Best Buy purchase was quite large, so towards the end of the term, the deferred interest was around $2,500.
I learned that, if you're late on a payment, miss a payment, or if your payment is $.01 less than the minimum monthly payment, they CAN attach all deferred interest to your balance. It was as if they failed to send my statements on 2 separate occasions on purpose, hoping I would miss a payment, therefore I would default on the agreement. I would've given them the benefit of the doubt if it happened once, but twice within a few months of one another just didn't seem right. I ended up just paying off the entire balance + sent them an extra $50, so they owe me and can't come back and say anything about me not being 'paid in full'.
The last experience left a bad taste for me, so instead of using HSBC's money for free for the term, i'm just gonna pay cash so I don't have to worry about them trying to screw me.
