topic Re: Good Move or Bad Move? in General Credit Topics

Good Move or Bad Move?

Clyons0203 — Thu, 01 Nov 2012 00:42:46 GMT

I have a situation and i want to handle it the best way possible and not hurt my credit score. I have 6 credit cards total. The Balances / Limits are:

$0 / $5000

$0 / $400

$0 / $1000

$0 / $1800

$1800 / $2500

$550 / $2500

Total $2350 / $13200 = 17.8% utilization

Fico Score of 740. Report does say I should bring down my debt and lower my utilization.

I owe $148k on a 2009 mortgage, and $14k in student loans and $4600 on a personal loan.

The personal loan has a very very high interest rate (21.8%). Should I pay off the high interest rate personal loan using my credit card which has an interest rate of 10%? This will move the dept from installments to revolving and save me money in interest, but will raise my utilization up to 52.6%?

Re: Good Move or Bad Move?

beb86 — Thu, 01 Nov 2012 02:04:59 GMT

@Clyons0203 wrote:
I have a situation and i want to handle it the best way possible and not hurt my credit score. I have 6 credit cards total. The Balances / Limits are:

$0 / $5000
$0 / $400
$0 / $1000
$0 / $1800
$1800 / $2500
$550 / $2500

Total $2350 / $13200 = 17.8% utilization

Fico Score of 740. Report does say I should bring down my debt and lower my utilization.

I owe $148k on a 2009 mortgage, and $14k in student loans and $4600 on a personal loan.

The personal loan has a very very high interest rate (21.8%). Should I pay off the high interest rate personal loan using my credit card which has an interest rate of 10%? This will move the dept from installments to revolving and save me money in interest, but will raise my utilization up to 52.6%?

try to BT your $1800/$2500 to the $5000 card that should help some since you wont be over 40% on any and then attack the balance

Re: Good Move or Bad Move?

brother7 — Thu, 01 Nov 2012 02:09:28 GMT

I think the question to ask is "Which is more important... maximizing my credit score or reducing my debt/interest rate on current debt?"

Since you already have a mortgage, you probably aren't planning to apply for a home loan. Since you already have 6 credit cards, it doesn't seem necessary to apply for more. So it seems there is no real reason to maintain a high credit score if there's no imminent need to apply for credit.

Therefore, I would take the temporary hit to the credit score and try to reduce/eliminate whichever debt has the highest interest rate,

Re: Good Move or Bad Move?

Anonymous — Thu, 01 Nov 2012 02:23:34 GMT

The 4600$ personal loan sounds like a payday loan interest rate, maybe?

I would maybe sugest to just pay off the loan and not pay debt with debt, but if it is a payday loan then something else is going on. Stretched too thin?

It would seem that your troubles go beyond the debt.

Either way, try to pay it off very quickly or BT and pay that off very quickly.

Re: Good Move or Bad Move?

Clyons0203 — Thu, 01 Nov 2012 02:36:03 GMT

It is not a payday loan. It is a regular personal loan. I have been paying on it for a year now. Started out as $5000, only down to $4600 after 10 months! Monthly payment is $137. The interest is killing me.

Re: Good Move or Bad Move?

Anonymous — Thu, 01 Nov 2012 02:52:08 GMT

@Clyons0203 wrote:
It is not a payday loan. It is a regular personal loan. I have been paying on it for a year now. Started out as $5000, only down to $4600 after 10 months! Monthly payment is $137. The interest is killing me.

Yeah the intrest rate is killing you big time.

I'm not a fan of BT, but that is an option.

If my numbers are right:

It would seem it would take 60 months to pay off the 5k at that intrest rate and paying only the min payment.

If you doubled the min payment (pay 274), it would take 22 months to pay off 5k with that rate.

BT is an option or just try to pay it off fast.