Personal loan from American Express, $4000, 36 payments of ~$150, 13.97%, to pay off a credit card, paid directly to the card issuer. This may not sound great, but it's much lower than that credit card, and the payment is about the same, only I could get it paid off in 3 years. This is pre-approved, no impact to my credit score. Going "credit shopping" is going to result in hard inquiries, which will lower it. I don't see a downside, but any advice or alternatives are welcome.

This message has been edited. Last edited by: egregore,

36 x $150 = $5,400

Don't know your circumstances but it seems like a lot of interest to me.

No, that rate is way to high. The first plan would be to try and work more and pay down aggressively as much as you can.

The second plan is what I did when money was super tight. Open a new credit that offers a zero percent balance transfer. Most will do it. If you call and ask your current credit card they might do it. But you have to play one against the other. Transfer all balances, or as much as they will allow to the zero percent for whatever term they give you 6mo or year. When that time is about to run out, call the other credit card and get a zero percent transfer back. Keep going back and forth until it's paid off.

I wouldn't settle for 13.9, keep after different cards for better rates.

I'd cancel cable TV change my phone service and sell everything I have not used in the last few months and sacrifice a few things I might like but do not need and eat beans out of the can and get a third job and pay the mo-fo off in six weeks.

I see your point, and you are right - it's an improvement to your current plan.

I also agree with the above - you can likely do better. 0% on a transfer for example. Or a personal loan through your bank maybe.

BTW I don't think your credit gets dinged too much on hard inquiries.

no

Before you do that, one thing you could try is calling your current card carrier and asking for a lower interest rate. They will often do it, especially if you threaten to move your balance to another card. It's what the big boys do to get better rates. All they can do is say no.

I get balance transfer offers all the time for 3-5% of the transferred balance and then 18-24 mos. 0%. That's a lot cheaper than any credit card interest rate. Do that and then make sure you knock it out well before the interest kicks in.

I'd roll it to a new credit card. 2% balance transfer fee usually. $80 interest, pay before year's end or flip balance again if 12-18mo is too short.

If it has to be three year term, check here.

www.lendingclub.com

Edited to correct loan company name.

This message has been edited. Last edited by: Skins2881,

This is going to sound like bragging, but it’s not meant that way.
During my divorce I got BAD into CC debt. Did it KNOWING it was going to be bad.
Circumstances, whatever. I’m out of that now.

Now, to your question, and the risk of sounding braggadocios;

I can walk into my bank (long time customer, whole family has banked there for years, etc) and borrow 3 times that amount, for less than 1/2 that interest rate, on my signature alone.

Please consider shipping around.

Check your credit score and if it's 700 or better you should be able to get an 18-24 month, zero interest CC loan. No way would I take the route you're are looking at.

Jim

13.97% sounds high to me.

quote:

Originally posted by kkina:
Before you do that, one thing you could try is calling your current card carrier and asking for a lower interest rate. They will often do it, especially if you threaten to move your balance to another card. It's what the big boys do to get better rates. All they can do is say no.

As kkina suggested, I'd recommend calling the credit card company first to see if they'd lower your rate.

Also, keep an eye out for 0% balance transfer offers. The offers I'm seeing sometimes waive the fee (usually 3 to 5%) and have a period of up to 2 years - I assume that they're gambling that you'll miss or be late with a payment. Even if you had to pay a 3% fee with a 0% interest rate over 2 years, you could pay off $4,120 ($4,000 + 3% fee) in 2 years with a monthly payment of $172. That's $1,000 left in your pocket compared to the American Express offer and 1 year earlier payoff.

It's difficult borrowing into prosperity.

Home equity loan perhaps?

I had a lot of debt when I was younger. Many hundreds of thousands of dollars (including school loans).

Here's the strategy:

1. Read Suze Orman's book, The Money Class.
2. Google and learn Dave Ramsey's Debt Snowball strategy.
3. Take your credit cards and freeze it in a block of ice. A Tupperware filled with water works.
4. Consolidate your credit cards with SoFi or Prosper.
5. Get a second job. I was an attorney, gainfully employed, and yet I still took on a second job as a teacher.
6. Now that you have more income, read Happy Money.
7. Create rules to use as financial guardrails. For example, I don't buy drinks when I eat out. Pay for food, or pay for drinks, but not both. That's a rule. I can articulate it, and I use it as a guardrail against wasteful decisions.

quote:

Originally posted by Krazeehorse:
Home equity loan perhaps?

Worst thing possible. Credit card debt is unsecured, you default they get nothing. Put it against your house, now you default and lose your house.

If you qualify.. NFCU has been offering cards at a 0 rate for balance transfers for 18 months. 12.5 after that

Some good suggestions here. If anybody is wondering, I am not broke or struggling. When my car needed tires I paid cash, for example. I have a decent-paying job and a reasonably good credit score. But I have more of this debt than is good for me, with retirement not too far away (five years). This card is not my only one, but the others are manageable. I am poised to pay one of the smaller ones off shortly. But this one is a total drag.

quote:

Originally posted by PR64:
36 x $150 = $5,400

I made a mistake there, the payment is actually $137. No, still not a great deal, I never said it was, but it sucks less than the current one. And it is still lower (but not by much) than my credit union (36 x $140 @ 14.45%.)

quote:

Originally posted by kkina:
Before you do that, one thing you could try is calling your current card carrier and asking for a lower interest rate.

It can't hurt. I'll have this to use as leverage.

quote:

Originally posted by Jimbo54:
Check your credit score and if it's 700 or better you should be able to get an 18-24 month, zero interest CC loan.

quote:

Originally posted by Aeteocles:
4. Consolidate your credit cards with SoFi or Prosper.

These ideas are intriguing. I've seen this SoFi advertised on TV. Depending on the source, my credit score is 670 or 716. (Why this disparity is another subject.) Would that get me something that beats Amex?

A balance transfer to a lower interest card, I don't think is feasible. I don't see anybody giving me four grand in new cards.

quote:

Originally posted by jeffxjet:

quote:

Originally posted by Krazeehorse:
Home equity loan perhaps?

Worst thing possible. Credit card debt is unsecured, you default they get nothing. Put it against your house, now you default and lose your house.

Second trusts and HELOCs subordinate to the first. You can't lose your house when a creditor wants to foreclose and isn't first in line. And no one who's first in line and still getting paid cares what those farther down the line want.

quote:

A balance transfer to a lower interest card, I don't think is feasible. I don't see anybody giving me four grand in new cards.

Why? ~700 is not a bad score.

Bestbuy gave me a $12,000 limit to buy $4,000 worth of stuff when my credit score was around 750-760.

When I was heavily indebted over $16,000 (after divorce). I flipped back and forth half with zero percent balance transfers (2% upfront fee). The other half I used www.lendingclub.com at 6-7% for three years.

You should try.