So I really want to hammer away my credit card debt. I have about 5k. I don’t like giving money away so I was wondering what would be the best route.
Basically I just would like to know if the money taken by a bank for a loan is the same as the money taken by the credit card company. Right now my APR is at nearly 32%.
And a debt consolidation loan is the way you go where should I go?
32%?! holy ballsack batman! transfer that shit to a 0% intro rate card asap!
32% is crazy!!!
the answer depends a little on your income that you can put towards this debt and how long you’ll need to carry it based on that…
if you have good income and credit, then open a new card with a low rate and 12months (or better) 0%. It will cost you 3% of the transfer to do this (unless you convince them to waive the fee)… but it will buy you time and save a lot of money. you’ll still have to make some minimum payment while under the 0% part.
this is probably your best way out.
you can also try calling your current company and asking them to lower the rate from 32%. they might do it unless you’ve been missing payments.
wow, find out what the usury rate is in your area. even though its far fetched they may be charging you an illegal interest rate. my law 101 prof said anything above 25% is usury in nys, but im sure there are exceptions
take the dave ramsey approach: dont spend any extra money until you are clear, pay off the highest interest rates asap then tackle the next highest one. you could get a consolidation loan, but that will just extend out your terms and will allow you to relax with your payments.
get a second job too, tis the season.
either do the credit card or a loan. Pay it off in a hurry to avoid added interest. I gurantee you a bank interest rate or a credit unions interest is WAY less than your 32 percent you have now
he’ll have trouble getting loan because he has so much outstanding debt making his debt to income ratio horrible… (unless he’s just been making really foolish choices) a transfer is really the only way out.
It is only 5K but like you said his DTI could be high depending on car loan and income, etc…
Try to get approved for a different card at 0% otherwise just start living simple to pay it off as fast as possible.
nobody racks up 5k @ 32% without having DTI issues.
I was told by the credit card company that the rate was the “default”.
I’ll see what I can do about doing a transfer instead, that sounds easier.
Whats DTI issues?
Debt to income?
If so I shouldn’t be that bad, between my wife and I we bring home about 45k a year with no car or house loans.
i doubt u can get 0% on a new card if u have history that got u to 32%
debt to income ratio… it means that you have a lot of loans out (everything in your name) compared to your income. it’s just as important as your credit score.
example: you see tons of 19 years olds talking about having an 800 credit score, but they can’t just go buy a Ferrari because they don’t have enough DTI to support a $2000 payment.
start calling credit card companies all over the place… shopping around will save you a lot in this case, don’t just take the first one)
when u DO do consolidation, itll F up ur DTI… cuz technically u have a limit of $0 but u owe money, cuz they will close the card
that is my understanding with my own experience anyway
I don’t understand I never missed a payment and have always paid more than the minimum. But between a few things that have happened in the last 2 years it just added up.
Again, they told me this was a “default” APR.
debt con. is a bad way to go. See if they will work with you on your interest rate first. Also shop around for another card or a bank loan to transfer to a lower rate. Then pay back asap.
Also look at the sticky post for credit 101 or whatever it is written by sureshot…good info in there.
“default APR” means that you’ve screwed up with paying them… it’s what they default to when you do something wrong.
you might want to ask them why this happened?
Take out a $5k personal loan or apply for an Overdraft line!!! Personal loan with decent credit should put you around 8-12% and overdraft accounts usually run 10-15%!!!
theblue do i made sense though? cuz right now its just a thought of mine
Debt to Income is a very simple reporting tool used by most/all lending agencies. It is simply your reported debt off of your credit report divided by your annual income. If you have $15k in reported annual debt and have an annual income of $40k, your debt to income ratio is 37%. Most lending agencies target a debt to income ratio below 50% before factoring in your additional financing. Other factors are also included such as collateral/credit score/etc. In the case of credit card debt, there are no hard assets for the bank to secure as collateral so you will most likely see a higher interest rate.