Ok, it doesn't sound the best but it will save me $$

[Anonymous]

Ok, can I get your guys opinion on this? I have worked very hard to pay off all of my credit accounts and below 10% utilization on everything::
0/3500--Jewelry cc
380/4600--Kay Jewlers
133/2500--Line of Credit (personal)
5995/7000-- Chase credit card


one of these things are not like the other..i want to get rid of it. So please see if I am stupid on this: the chase credit card is at 16.24%, line of credit is at 9.9%.

Also, my job started offering an employee assistance loan (WITH NO HARD INQUIRY) for up to 2600 at a 3.25% rate.

It keeps creeping into my mind to get that loan and using the line of credit fully to pay off (nearly) the chase cc. I know it would save me money in interest, but I just don't know about it. Like it would be like "robbing two Peters to pay Paul".

plus not sure if my score would go down cuz the line of credit would be maxed. Opinions or thoughts? Please don't hold back lol.

[Anonymous]

It's exactly like robbing two Peters to pay Paul, but sometimes that makes sense.

What's best for your wallet and what's best for your credit score aren't always the same thing, and if you're not about to go out and apply for an auto loan or mortgage, do what's best for your wallet. 

Yes, the maxing out of the LOC will hurt your credit score, but it will also save you money in interest and FICO has no memory for utilization, so once you've paid your LOC down, your score will fully recover if everything else stays the same.

[jbsea]

+1

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@Anonymous wrote:

It's exactly like robbing two Peters to pay Paul, but sometimes that makes sense.

What's best for your wallet and what's best for your credit score aren't always the same thing, and if you're not about to go out and apply for an auto loan or mortgage, do what's best for your wallet. 

Yes, the maxing out of the LOC will hurt your credit score, but it will also save you money in interest and FICO has no memory for utilization, so once you've paid your LOC down, your score will fully recover if everything else stays the same.

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[NRB525]

Geez, take the Employee Assistance Loan. With no HP, it probably doesn't report on your credit report, and even if it does, you'll be able to attack the principal, pay it down much faster than with the 16% APR headwind. Sounds like a good BT offer to me.

When you are trying to save money on interest expense, and get principal balances paid down, FICO can go to heck for all I care. I want to save the cash and not spend it on interest. The FICO will find its way back on its own, later.

To be clear, if there are no fees, and they let you, then borrow the entire $2,500 from the Employee loan, just be dern sure you use all that $2,500 to pay down your Chase account. This isn't a bonus, it's a balance transfer and your objective is to reduce the total balance outstanding.

Also maxing the PLOC is a short term minor issue for your FICO score. You are already putting pressure on the FICO score by having the high utilization overall. Shifting balances around is not going to make much difference, except enabling you to pay it down faster to let the FICO rise in the future.

[Anonymous]

IMHO obsessing over FICO vs overall financial health is like starving yourself to lose weight. Yes, the number on the scale may look good, but at what cost?

[happypill]

That is a good plan if - and it is a very big IF - you don't run up your Chase card after you pay it off with the two lines of credit.  You'll be able to pay everything off faster, save on interest over the long run and most likely your credit score will go up because you won't have that card showing as nearly maxed out any more.

OTOH, if you get the balance on the Chase card moved to the lines of credit, then just run up your Chase card again, you'll be in an even deeper hole.

[lg8302ch]

Do what is best for your wallet. Save money on interest where you can.  I would take that employee offer and forget about the impact on your scores at this time.  Fico has no memory and once you pay down util your scores will come up. You should not apply for anything until that balance is paid down so the scores do not need to be in perfect position. 

[bch238]

Something about using a loan associated with my employment would be worrisome to me.  But if you're okay with it, it makes sense to trade a lower APR (averaged on two loans) and pay off the Chase card.  I would also cancel the two jewelry credit cards for good measure, if your purpose really is to pay down all debt.  I don't see the point of jewelry store cards when you have a general credit card available.

[Anonymous]

Hmm, well I may not want to close that card due to a negative impact on my utilization, I just got it when my fico was like 570 and thats all i could get!! Thank you for all of the advice, I will take the plunge and do that today!!

[bch238]

If you pay off the Chase card, then your credit card utilization will be 0% regardless of other open accounts.