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Credit Card Debt, Line of Credit

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johnnierat
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Credit Card Debt, Line of Credit  Reply with quote  

I am planning on refinancing my home but can't do so until May due to the fact my home was recently on the market. Fannie/Freddie say it has to be off the market for 6 months in order to do a cash out refinance.

That being said, I have credit card debt of $25,000 and the $650 monthly payments are killing me.

Should I:
A) Add the $25,000 of credit card debt to an existing $10,000 interest only line of credit I have (current rate on the $10,000 is 4.5%)?

B) Try and transfer the $25,000 to a new low interest credit card with low or no transfer fee's?

C) Some option I'm not thinking of?

By refinancing, all of this debt will be rolled into one mortgage, and assuming 30-year rates are 6% or less by May, my payments for my mortgage, $10,000 LOC and $25,000 credit card debt will be the same as my current mortgage payment - based on what I'm going to borrow.
Post Wed Jan 28, 2009 12:16 am
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fatherbride
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try option A, i think that good. for this situation
Post Wed Jan 28, 2009 4:33 am
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littleroc02us
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(C) would be my choice. Not sure what your employment and budget is, but I would suggest getting another job to conquer this debt with passion. Also, sell or Ebay items that are sitting around that have value. You need to get out of debt before you buy this house. I'm just trying to advise you that you don't want to buy this house with this added debt. To much risk involved.
Post Tue Feb 10, 2009 4:28 pm
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Zector
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Option D.

Sit down and really access why you have accumulated so much consumer debt. Be very honest with yourself. Then make a plan to live within your income means. in addition set down a payment plan to pay off your debt within 2-3 years all within your income means. This will probably mean find additional income means.

Until you do this, and stick to it, donít bother wasting your time. Moving money around to lower interest rates, 6 month no interest or whatever is a waste of your time, its not fixing the problem.

Tackle the real problem, why you got so must debt. NEVER put your consumer debt onto your house (some exceptions like schooling, or home repairs). Your home equity should be sacred and never touched just because you want a new plasma tv or shiny car. Except of course you are happy paying others to put food on their table for the rest of your life with rent/interest payments.

Long term planning set down your goals. this should include paying off your house in 20 ish years, or sooner depending on how long you have had it. Other plans should include schooling for kids, maybe a nice vacation or something. This can be done, but you have to be honest and make a good plan to stick to.

There is a very good show on tv, and they have a jar system to help you live within you means. Each pay you take out cash for all you spending (food, gas, clothes etc) and put them into labelled jars. When they are empty you are out of money, no credit or debit cards. Its a good system if you stick to it.

Banks / lenders want to keep you in debt to them. They want your interest. They will jazz it up in lower payments which means they get more interest, but all of a sudden that new BMW is within your grasp, over 10 years payments it only 550 / month or whatever they are selling. Financial security and freedom is seeing threw this BS, and in the end owing nothing to nobody except of course the tax man. Which there is ways to reduce as well all within the law but being smart.

DO NOT REFINANCE YOUR HOME!! If you keep doing this, you might as well go out and rent a home. Then you wont have to worry about home repairs popping up. By just pushing back your home payments you are taking on additional interest payments.

Time to tackle the problem! Be honest with yourself. Is refinancing your home fixing the problem or just pushing it back?
Post Tue Feb 17, 2009 12:23 pm
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JTucker
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Fact is no options will make you happy only can reduce your burden a bit. Option B seems to be good as if it have low interest rate than before.
Post Sun Jun 21, 2009 7:44 pm
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expertcredit09
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I think Zector is right you should take his advice seriously.

HSBC Credit Card


Last edited by expertcredit09 on Tue Sep 01, 2009 6:17 am; edited 1 time in total
Post Thu Aug 13, 2009 6:32 am
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frankcarlton
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Zector is RIGHT.

You need to create a plan to live within your means - if this means downgrading you car, getting the smaller cable package, driving less to save on gas, shopping for less expensive insurance, selling a few items you don't need, etc... do it. You need to address the primary problem FIRST, spending more than you make.

Secondly, You NEED to SAVE the cash you've trimmed from the budge. SAVE IT - DON'T SPEND IT. This money serves multiple purposes, 1) Emergency fund, 2) What you'll use to buy luxuries for yourself, 3) shows you the value of cash. As you realized the value of money you won't be so apt to use cash or credit, you'll actually WANT to save more...

Third, take your highest interest account, and see if you can qualify for a hardship program. They'll close the account, give you a ROCK BOTTOM interest rate, but you'll have a clear path to getting that account PAID IN FULL. Most often, credit card companies will NOT even talk about a hardship program until you're past due, don't be afraid of it, just do it with a plan and SAVE THE CASH. Late payments are far better than SETTLED FOR LESS, BANKRUPTCY, or constantly being over your limit...

Good luck,
Frank Carlton
Post Wed Aug 26, 2009 6:31 pm
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jacktom
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i think you try option B its the best one in this time
Post Fri Sep 18, 2009 10:02 pm
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Stuartthomas
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i think option B would be the best option for you..
Post Wed Aug 18, 2010 11:13 am
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jason_simpson
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I would go for (C)

First, stop using Credit Cards. Next, dust off the counselor's budget. If you didn't receive one, go to a real counseling agency and get one. You can find one by visiting www.aiccca.org or www.debtadvice.org. Using the budget, allocate most of your nonessential income to paying down your debt. Save at least something in a savings account as well, because you might need it, since you won't have your cards to fall back on anymore.

Allot each creditor a portion of your nonessential income. It must be a realistic, sustainable amount, because you are going to be using that amount as your offer when you call your lender to ask for a hardship program. You definitely do not want to be in a position of being unable to make payments if you can get your lender to agree to your request for a hardship program.
Post Sat Aug 21, 2010 5:40 am
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Adria.John
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Well, option B is good if you have good income source and credit score. But if you are struggling with the credit score then taking money through Credit card can create huge problems to you. The best option is as Jason has advised, consult some debt manager and decide the best option fo you.

Loan Expert!
Post Sat Aug 21, 2010 11:08 am
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adrian2grove
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This is really a nice posts, that you have updated us with all of nice information that can be very useful for future aspect. Thanks for sharing.
Post Mon Aug 23, 2010 2:58 am
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b2122313
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Vote for Zector too! This's really helpful
Post Tue Aug 24, 2010 8:16 pm
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financegenie
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Well if i would have been in your position i will opt for finance adviser they will defiantly give some useful suggestion to your problem, if you asking to me i will go for option (B)
Post Thu Sep 30, 2010 12:48 pm
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