As part of my due diligence, I called my banker to find out what he can offer as a line of credit rate should I wish to self finance my next car.
There wasn't any great deals as far as I'm concerned -- prime + 1%. But here's what did surprise me.
Lines of credits that are part of the equity of your house now will balloon to the available credit ie. will increase as you pay your house off, without having to apply for an increase... sounds dangerous, doesn't it?
To me it does. I find spending large sums of money really easy. Seeing I have equity available and having access to it are 2 very different things.
I can see just how easy it can be to say "yes" especially when they will only need 5 mins of my time to sign and go over paperwork.
So what I decided to do is to limit my expenditures to my unsecured lines of credits. That way, there is a ceiling on the amount.