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Senior Contributor
creditwherecreditisdue
Posts: 4,923
Registered: ‎04-19-2009
0

Re: Opinions Requested - HELOC variable rate to Pay off CC Debt with increased APRs


PurpleHaze wrote:

Thanks for your feedback.

 

I took out a loan last year (dumb dumb move) from HFC to pay off CCs which I did. Then I ran that line of credit back up at 25%.


This really concerns me.

Senior Contributor
txjohn
Posts: 4,214
Registered: ‎09-12-2008
0

Re: Opinions Requested - HELOC variable rate to Pay off CC Debt with increased APRs


creditwherecreditisdue wrote:

PurpleHaze wrote:

Thanks for your feedback.

 

I took out a loan last year (dumb dumb move) from HFC to pay off CCs which I did. Then I ran that line of credit back up at 25%.


This really concerns me.


 

I don't see this as a real concern.  Unless OP is maxed on cards, they have the ability to run up more CC debt with or without HELOC.

 

OP has stipulated that they understand the risks of running up new debt and cited a case in which they "learned their lesson" and now want to restructure debt to minimize interest.

 

The bottom line is that HELOC, like any credit, can be a financial tool or financial prison, depending on how they use it.  I feel that OP is informed enough to understand the difference and thus must make the choices which best represent their interests.

 

Keeping debt at high APR does not reduce risk of over extending nor does it reduce debt, it just increases the cost of the debt.

 

Thus, a well worded warning against such situations hopefully suffices and OP will take advantage of the current opportunity to use the tools of debt reduction and not become burdened with additional debt.  But debt is not the result of having credit, it is the result of bad financial choices, poor planning, lack of budgeting and ambivalence to future financial needs (not a jab at anyone, but the hard facts or results of over extension for pure impulse or luxury purchases beyond income).

 

But, I agree in principle with the concern stated. 

 

 

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09/03/2009 TU: 777, EQ: 776 ($8 balance on an account dropped me out of 780's)
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Senior Contributor
creditwherecreditisdue
Posts: 4,923
Registered: ‎04-19-2009
0

Re: Opinions Requested - HELOC variable rate to Pay off CC Debt with increased APRs

Do you know the recidivism rate for people that get workouts on their mortgages? It's one of the main reason why mortgage holders are dragging their feet on these restructurings. Those who get themselves jammed up tend to do it again. That is a well established fact.

 

 

Established Contributor
PurpleHaze
Posts: 717
Registered: ‎03-05-2008
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Re: Opinions Requested - HELOC variable rate to Pay off CC Debt with increased APRs


txjohn wrote:

creditwherecreditisdue wrote:

PurpleHaze wrote:

Thanks for your feedback.

 

I took out a loan last year (dumb dumb move) from HFC to pay off CCs which I did. Then I ran that line of credit back up at 25%.


This really concerns me.


 

I don't see this as a real concern.  Unless OP is maxed on cards, they have the ability to run up more CC debt with or without HELOC.

 

OP has stipulated that they understand the risks of running up new debt and cited a case in which they "learned their lesson" and now want to restructure debt to minimize interest.

 

The bottom line is that HELOC, like any credit, can be a financial tool or financial prison, depending on how they use it.  I feel that OP is informed enough to understand the difference and thus must make the choices which best represent their interests.

 

Keeping debt at high APR does not reduce risk of over extending nor does it reduce debt, it just increases the cost of the debt.

 

Thus, a well worded warning against such situations hopefully suffices and OP will take advantage of the current opportunity to use the tools of debt reduction and not become burdened with additional debt.  But debt is not the result of having credit, it is the result of bad financial choices, poor planning, lack of budgeting and ambivalence to future financial needs (not a jab at anyone, but the hard facts or results of over extension for pure impulse or luxury purchases beyond income).

 

But, I agree in principle with the concern stated. 

 

 


Thank you both for presenting both sides. Both are valid. CWCID is correct ... I did make some bad choices previously, thus why my debt went back up. However, as TxJohn stated, I haved learned the error of my ways and have been practicing more sound credit habits. My HELOC became available today. I am going to start slow and pay off two-three of my high APR cards first. Pay off the HELOC and then continue to work to pay down my additional debt. 

 

 


Starting Score: EQ: 633 (12/31/09) TU: 651 (12/31/09)
Current Score: EQ:633 TU: 651
Goal Score: EQ: 700 TU:700


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haulingthescoreup
Posts: 28,115
Registered: ‎04-01-2007
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Re: Opinions Requested - HELOC variable rate to Pay off CC Debt with increased APRs


PurpleHaze wrote:

...My HELOC became available today. I am going to start slow and pay off two-three of my high APR cards first. Pay off the HELOC and then continue to work to pay down my additional debt. 

 

 



That sounds like a great way to do it. That will help reduce your debt without letting the HELOC get scary on you. Smart thinking!

Congrats on the HELOC.
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Established Contributor
PurpleHaze
Posts: 717
Registered: ‎03-05-2008
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Re: Opinions Requested - HELOC variable rate to Pay off CC Debt with increased APRs


haulingthescoreup wrote:

PurpleHaze wrote:

...My HELOC became available today. I am going to start slow and pay off two-three of my high APR cards first. Pay off the HELOC and then continue to work to pay down my additional debt. 

 

 

 



That sounds like a great way to do it. That will help reduce your debt without letting the HELOC get scary on you. Smart thinking!

Congrats on the HELOC.

 

Thanks HTSU.  I am excited to get things back on track ... and be sensible and proactive versus reactive. My report is good and my scores are ok, but I could be so much better off.  I take my hat off to you and several other members who consistently provide honest, productive, valuable and positive feedback.

Starting Score: EQ: 633 (12/31/09) TU: 651 (12/31/09)
Current Score: EQ:633 TU: 651
Goal Score: EQ: 700 TU:700


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