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Question about credit card debt
Posted on 5/16/19 at 11:51 am
Posted on 5/16/19 at 11:51 am
I’ve got ~$8,200 in credit card debt with Chase. Most of this is due to fiscal irresponsibility and I’ll say immaturity over a couple year time period but I’ve worked on myself to change that, and I’m making a commitment to get it paid off. I’ve always made payments above the minimum and been on time with them, it’s just been a slow process chipping away at it.
So my question is this. Is it possible to take out a personal loan from a different bank to pay off the balance of the credit card? Would it even make sense to do something like that? The reason I ask is because I assume the interest rate would be better, but I don’t know what type of term/structure a bank would charge for that.
So my question is this. Is it possible to take out a personal loan from a different bank to pay off the balance of the credit card? Would it even make sense to do something like that? The reason I ask is because I assume the interest rate would be better, but I don’t know what type of term/structure a bank would charge for that.
8
Posted on 5/16/19 at 12:08 pm to FortyCreek
quote:
s it possible to take out a personal loan from a different bank to pay off the balance of the credit card? Would it even make sense to do something like that? The reason I ask is because I assume the interest rate would be better, but I don’t know what type of term/structure a bank would charge for that.
It is possible, but unsecured loans (a loan with nothing offered as collateral) aren't the easiest things to get, esp if you have poor credit. Also, the interest rate on an unsecured personal loan is often not great (though it can be better than a car loan).
Join your local credit union, and see what it offers in the way of debt consolitation or unsecured personal loans. Meanwhile, generate more income: get a PT job during your off hours, sell crap you don't use/need (like jewelry, designer clothes, expensive toys), drive less and try to find cheaper fuel, eat beans & rice....
Simply borrowing money to pay off debt won't help you change your behavior. You've got to sweat it out (ie, through working more).
Posted on 5/16/19 at 12:20 pm to FortyCreek
Don't do anything until you cut up your credit card and live without it for long enough you don't Have to have it anymore.
The last thing you want in debt is to allow yourself to get into more debt by being able to afford more debt.
Then, do everything possible to pay it off and move on. Get a part time job, sell stuff, and refinance the debt.
You can get a 0% loan from a credit card for 12 months with a 3% or so transfer fee. So basically 3% interest over 12 months. Sell some crap, get a part time job, and pay it off in 2 months. No reason everybody could not pay off 9,000 in 12 months.
The last thing you want in debt is to allow yourself to get into more debt by being able to afford more debt.
Then, do everything possible to pay it off and move on. Get a part time job, sell stuff, and refinance the debt.
You can get a 0% loan from a credit card for 12 months with a 3% or so transfer fee. So basically 3% interest over 12 months. Sell some crap, get a part time job, and pay it off in 2 months. No reason everybody could not pay off 9,000 in 12 months.
Posted on 5/16/19 at 12:24 pm to FortyCreek
See if you can do a balance transfer to Discover with a lower rate. I've been getting mailers from Discover offering 0% for 18 months with a 3% transaction fee.
Posted on 5/16/19 at 1:39 pm to TigerintheNO
Dave Ramsey wouldn't like you
Posted on 5/16/19 at 4:09 pm to FortyCreek
quote:
I’ve worked on myself to change that
Everyone makes mistakes in life. Good on you for waking up. And hopefully that means that you're living within a budget now.
Yes, depending on your income and credit worthiness, you can get either a personal loan or a credit card (for balance transfer purposes *only*). If you go for the card, just make sure that you can pay the balance in full before the teaser rate expires.
Posted on 5/16/19 at 4:14 pm to FortyCreek
quote:
Would it even make sense to do something like that?
Not in my opinion. I suggest you buckle down and pay the CC off from your income.
Do you have other debts?
This post was edited on 5/16/19 at 4:19 pm
Posted on 5/16/19 at 5:42 pm to FortyCreek
2 missing pieces of info
What is the card interest rate?
What is your credit score?
If you have a 700 plus credit score, you might be able to get some decent options with a unsecured loan or a 0% for a year credit card.
The credit union where my wife works at, used to have something called the 5/5/50 plan. It was $5,000 debt consolidation (they mailed the checks directly to your creditors), 5% interest, 50 semi-monthly payments via payroll deduction (so 25 months). It was only offered to employees though but it was pretty easy to get. Several of her friends did that.
What is the card interest rate?
What is your credit score?
If you have a 700 plus credit score, you might be able to get some decent options with a unsecured loan or a 0% for a year credit card.
The credit union where my wife works at, used to have something called the 5/5/50 plan. It was $5,000 debt consolidation (they mailed the checks directly to your creditors), 5% interest, 50 semi-monthly payments via payroll deduction (so 25 months). It was only offered to employees though but it was pretty easy to get. Several of her friends did that.
Posted on 5/16/19 at 7:01 pm to FortyCreek
Like others mentioned I don’t know of a magic bullet cure. It’s not a back breaking number so it may just take a period of time of hard work and serious discipline.
Posted on 5/16/19 at 11:01 pm to weagle99
No other debt at this time. Still in my mid to late 20s and beginning to think a little more about the future. I put enough in my 401k to get my employer’s full match plus a little extra in a Roth each month but just feel like I’m pissing away money paying off this card that could be going to retirement or saving up for a house down payment.
Like I said in my OP, a lot of the debt is irresponsibility / immaturity on my part doing and that put me in a hole. Up until recently I’ve been kind of treading water, just keeping my balance about the same from month to month. Finally feel like I’m in a spot where I can make some headway getting it paid off though.
Thanks for the responses.
Like I said in my OP, a lot of the debt is irresponsibility / immaturity on my part doing and that put me in a hole. Up until recently I’ve been kind of treading water, just keeping my balance about the same from month to month. Finally feel like I’m in a spot where I can make some headway getting it paid off though.
Thanks for the responses.
Posted on 5/16/19 at 11:56 pm to FortyCreek
quote:
No other debt at this time. Still in my mid to late 20s and beginning to think a little more about the future. I put enough in my 401k to get my employer’s full match plus a little extra in a Roth each month but just feel like I’m pissing away money paying off this card that could be going to retirement or saving up for a house down payment.
I may be off here, but given your age, I would put the money into paying off the cc instead of retirement. I hate CC debt with a passion, so I would pay that off ASAP with all available funds.
Posted on 5/17/19 at 1:29 am to TigerintheNO
quote:
See if you can do a balance transfer to Discover with a lower rate. I've been getting mailers from Discover offering 0% for 18 months with a 3% transaction fee.
Reading a breakdown on NerdWallet, the AMEX Everyday Card has a 0% intro APR on balance transfers and an intro offer for no balance transfer fees within the first 60 days. Not sure how generous their credit line might be compared to Discover or Chase.
Posted on 5/17/19 at 8:17 am to nobigdeal69
So no contributions toward 401k? I was under the impression I should contribute enough to get my employer match. I’m planning on pausing on my Roth contributions until everything is paid off.
Posted on 5/17/19 at 8:37 am to FortyCreek
quote:
So no contributions toward 401k? I was under the impression I should contribute enough to get my employer match. I’m planning on pausing on my Roth contributions until everything is paid off.
I would think 401k to match is always highest priority. It's a guaranteed 100% return if its a 1:1 match.
Cut spending, find a roommate if that's an option.
You can pull out principle you've put into your Roth but I doubt most here would agree with that.
Posted on 5/17/19 at 8:46 am to FortyCreek
quote:
plus a little extra in a Roth each month
How much basis do you have in the Roth? Enough to pay off the CC debt? Normally I wouldn't recommend touching retirement money, but since you are young and have a 401k, if you have enough basis in the Roth to pull some out and pay off the CC debt, I don't think it's a bad idea here. There's no penalty for withdrawing your Roth contributions.
Otherwise, applying for a card with 0% interest on balance transfers is the way to go.
Posted on 5/17/19 at 3:16 pm to FortyCreek
Transferring it to an interest free card only works if you can pay the total before the new card starts charging you intetest. Heloc if you own a home or just redirect your 401k contributions into it until its paid. Whatever course you take, you're young enough to cover it quickly. Never take money from an IRA or 401k, fees are like interest. Good luck
Posted on 5/17/19 at 9:43 pm to done dancing
Get a 2nd job and stop putting in your 401K till the debt is paid off.
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