Moving revolving debt to installment loan?

[Anonymous]

Ok, two years ago I purchased a motorcycle to commute with. At the time I understood that I was getting a standard installment loan, however, I was a bit suprised to find out a few months later that instead they financed this thing through opening up an HSBC revolving credit account. I got a card and everything in the mail, it only works through the dealership network and select parts vendors but a credit card none the less.  It came with a 0% introductary rate for the first two years, which then bumped up to 14%.  I wasnt happy about being duped but the with the 0% I wasnt too furious.

Now the rates are up and I still have a $5K balance left. This last time I've pulled my reports its said I'm getting marked down for high revolving balances, most of which is that Yamaha card. If it was counted as a different type of debt I think I'd be in better shape, it is a vehicle afterall. 

So my question is, would it make sense to apply for an installment type loan and pay off the rest of that balance? Same total debt but moved from revolving to installment.  Or would the benifit of reducing total revolving debt be less than the hit of a new inquery and new account?

I'm not sure if I should just keep paying it off as is or get a regular loan with a lower rate but with the negatives of new account and new inqueries.  Any ideas?

Thanks. 

[MarineVietVet]

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@Anonymous wrote:

Ok, two years ago I purchased a motorcycle to commute with. At the time I understood that I was getting a standard installment loan, however, I was a bit suprised to find out a few months later that instead they financed this thing through opening up an HSBC revolving credit account. I got a card and everything in the mail, it only works through the dealership network and select parts vendors but a credit card none the less.  It came with a 0% introductary rate for the first two years, which then bumped up to 14%.  I wasnt happy about being duped but the with the 0% I wasnt too furious.

Now the rates are up and I still have a $5K balance left. This last time I've pulled my reports its said I'm getting marked down for high revolving balances, most of which is that Yamaha card. If it was counted as a different type of debt I think I'd be in better shape, it is a vehicle afterall. 

So my question is, would it make sense to apply for an installment type loan and pay off the rest of that balance? Same total debt but moved from revolving to installment.  Or would the benifit of reducing total revolving debt be less than the hit of a new inquery and new account?

I'm not sure if I should just keep paying it off as is or get a regular loan with a lower rate but with the negatives of new account and new inqueries.  Any ideas?

Thanks. 

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Have you had anymore new credit in the past year? If not then the effect of a new inquiry and new loan would be minimal I think.

14% these days is not all that bad. What is the utilization (balance /credit limit) on this card? What is your overall util counting any other revolving accounts?

What are your payments? How long will it take you to pay it off making your current payments?

Are you pretty sure you could get refinanced at a lower rate? Switching from revolving to installment is definitely an option.

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[Anonymous]

Have you had anymore new credit in the past year? If not then the effect of a new inquiry and new loan would be minimal I think.

No. Just passed the 1 yr mark on my last card. No other inqueries.

14% these days is not all that bad. What is the utilization (balance /credit limit) on this card? What is your overall util counting any other revolving accounts?

 
Credit utilization on this card is 50%  total util of all accounts is showing as 56%, should be a lot less as I paid off a big chunk of all the cards last month but it hasnt shown up yet.  Other regular credit cards have much smaller limits than this one.

What are your payments? How long will it take you to pay it off making your current payments?

At my current rate trying to aggressively pay down everything at the same time it'll take me another 2 years ish.

Are you pretty sure you could get refinanced at a lower rate? Switching from revolving to installment is definitely an option.

Fairly confident, Discover occasionally sends me letters saying I'm one of their gold something rated members and keeps offering me 36mo 8% loans.  I could also possibly use a few classic motorcycles as collateral for a loan through my local bank too maybe at a better rate.

So a loan wouldnt help me pay it off any faster but would change the debt type. Is it worth the trouble for something that would get paid off in 2 yrs anyway? 

[Jazzzy]

To me, it would depend upon interest rate.

Also, if you have another revolving credit card, moving this debt to installment helps your credit mix. If not...then the answer would depend upon interest rate.