As the title says, I have $4,000 in credit card debt. I made a bad choice and bought a dog for my ex-girlfriend. Now I don’t have a girlfriend anymore, but the dog is still at her place… anyway, I’ve made two months of payments and brought it down to around $3,800. My monthly payment is $180 with a 35.99% interest rate. I’m trying to figure out if it’d be a good idea to take out a personal loan with a lower rate, around 26%, to pay off the debt faster. Or should I look for a credit card with a promotional interest rate? I want to clear this debt as soon as possible, but between school payments, bills at home, and this debt, it’s tough to keep losing so much on interest each month.
If your FICO is in the middle range, Upstart may offer you a reduced rate. Dogs at shelters also require homes. There are many purebred cats and dogs that end up there.
My credit score dropped to 620 after applying for the credit card; it had previously been approximately 730. Undoubtedly a terrible decision that I deeply regret, especially in light of the fact that I had the option to get a puppy somewhere else. When I attempted Upstart, I was only going to get up to $2,000 and the same rate. Credit Karma shows 26% APR on a couple of them, but I’ll have to put my car up as collateral. I don’t have to worry about making payments because my car is paid off in full; all I want is to be able to reduce the amount each month while I’m in school and take care of it later when I start working more hours.
Before the year ends, the Fed is anticipated to cut rates a few more times. If you maintain everything up to date, you may see a slight increase in your FICO score and a slight decrease in their rate.
Have you given a car refinance loan any thought? Alternatively, to pay off your high-rate card, take on some side employment and reduce “nice to have” spending. You can always go door to door and offer to do odd jobs, mow lawns, or work as a freelance worker on platforms like Uber. $3800 is not too much, and putting up with more effort and fewer luxuries for a few months should be sufficient to pay it all off.
First, make the largest payments you can each month. Second, if you can’t trust yourself to avoid using credit that you can’t pay off in full monthly, then don’t apply for more credit cards until you’re able to. However, if you’re able to manage it, getting a second card with a balance transfer offer could help a lot. You’d typically have 12 months at 0% interest, so aim to pay as much as possible during that period. Ideally, try to pay closer to $300 a month, but even $200 or more would get you halfway through the debt in a year. Stay focused and cut back on unnecessary spending where possible.
And please, avoid spending money you don’t have on a girlfriend or anything else in the future.
There are only three reasons why those balance transfer cards might be worthwhile:
There is no automatic charge of interest on the leftover amount at the end of the interest-free term.
It’s not a very expensive price to transfer the balance.
OP agrees in full to refrain from adding to the card balance after the initial transfer of balance.
35.99% percentage? Jesus. What is the 5k limit on this card? Similar to a payday loan, it almost seems as though they specifically chose you to borrow the maximum amount at the greatest interest rate. Credit card style of payday loans.
It was a credit card from Petland. I mistakenly believed I was taking out a loan until I learned they had opened and maxed out a credit card. They informed me I would be paying $180 a month for two years, but they never disclosed the interest rate. I made a terrible decision that never should have happened, but I never realized I was going to be obtaining a credit card until I heard how they presented things.
I’d suggest looking into a consolidation loan from a credit union or online bank to get a better interest rate (I did this after college and got a $3k loan at 8%, with payments around $100). Once it’s paid off, don’t touch it again. You could also go for another credit card with a 0% offer, as others have mentioned, but I personally prefer a consolidation loan because you can’t spend it like a credit card. Don’t be too hard on yourself this kind of thing happens, and $4k isn’t that bad in the long run. Just find a loan with a lower rate to help you pay it off while building your credit. Having a mix of debt can actually improve your credit score, so this could work in your favor.