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We went off the deep end with debt this year. Bought a house, two motorcycles (which don't work now), appliances for the house, space heaters, etc. Long story short, I'm looking to consolidate $18,000 worth of debt.
My average current APR is 17%, with the two highest being 24 and 25%. Here are my options:
Consolidate max of $10,000 to a 11.25% personal loan over 5 years.
Consolidate to my LoC (which has a current balance of $12,300, so it would then get $5,700 more put on), which is at 10.75% variable.
Edit: I also have an 8.9% variable LoC with a limit of $7,000. Current balance is $3,400. So that accounts for some of the debt, but is a possibility for consolidating some other higher interest debt.
One of our debts is through BillMeLater (now PayPal Credit), which only allows cash payments. It's the 24% account, with a balance of $1,950. They also don't appear on my credit report for some reason. Fishy.
...........My average current APR is 17%, with the two highest being 24 and 25%. ........
Yikes.
How is your credit score? Maybe not so good if you've had to pay 25%, but some of those cash back cards are that high even if you have good credit.
The first thing to do is to call around and see if you can get a lower interest card that will do a balance transfer for you. You should be able to do better than 11.75%. Unless your credit is totally trashed, you should be able to get 9% at almost any credit union.
Get the rate as low as you can and then stop borrowing money. $2,000 at 24% for Paypal, so a very good chance that was for stuff you didn't really need. Get a grip. Nobody is doing you a favor when they loan you money. Every time you think about borrowing, remember it isn't a favor to you; they want to rip off a big strip of your skin. Wrapping their intentions in honey does not make is a good deal for you.
Also, if you call, you can sometimes get your card rate lowered and your available credit raised. Move debt to a lower interest rate and then stop borrowing until that is paid off.
I have good credit. Used to be excellent when I opened these accounts.
The two high ones are the standard rate. They don't go any lower.
We have changed our spending. Unfortunately about $7,000 of it was necessary after our house wouldn't heat and our car got totaled.
Have you called any creditors and tried to negotiate a lower rate? 24% and 25% is far above market rates for someone with good credit. Ask them politely at first, if they won't budge, tell them you have good credit and will move your debt elsewhere to get a lower rate.
Why not a HELOC, provided you have sufficient home equity and your credit card debt is not a disqualifying factor? I'm not a proponent of collateralizing one's home, but given HELOC rates that currently range from 4-7%, it sure beats your credit card rates. You could use a HELOC to pay off ALL the credit cards, then thereafter pay off the HELOC.
Why not a HELOC, provided you have sufficient home equity and your credit card debt is not a disqualifying factor? I'm not a proponent of collateralizing one's home, but given HELOC rates that currently range from 4-7%, it sure beats your credit card rates. You could use a HELOC to pay off ALL the credit cards, then thereafter pay off the HELOC.
They just bought the house this year, so unless they got a killer deal or put a hefty down payment there is little equity that can be borrowed out...
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