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All these days i am silent member of the community and the community posts always helped me. However with some unexpected debt that came up, i am in a fix and would require a suggestion from the community.
I currently have a balance of 23K on my Amex card which is under 0APR until next month and start charging an interest rate of 20.9% APR from July end. I was offered a personal loan at 15%. now should i take the personal loan and claer the Amex card ? or should i continue paying up the Balance. I can pay nearly around 1500$ a month.
A new loan may involve a hard pull.
If approved and reported, it will have an initial age of zero, lowering your overall AAoA.
It will also add an installment account with 100% of original loan as unpaid balance.
Thus, it will have some initial scoring impact.
Balanced against the impact of a new loan is the reduction in % util of revolving that will occur by shilfting the debt deck chair from revolving to installment.
Also, you will save overall interest.
It is a balancing decision with no clear yes or no.
In general, I would likely take the plunge based on the likely scoring improvement that will be obtaind from reduction of % util on the revolving account.
% util of revolving is normally a more significant scoring factor than AAoA or a short-live hard pull.