I got a congratulations from the lady at the credit card company! :) Tonight I called to stop any use on my credit card account. Not because I don't trust myself but just to ensure that the card can no longer be used because I sent in the payment yesterday! We got chatting and I told her about my debt free plan and she was quite excited for me. I also lowered the available credit on my other account since I don't need it to be as high as it was. It feels good to be in control of my credit. I remember a few years ago calling to ask if they could up my credit limit because I was out of money and in a bit of a bind. That is a scary, stressful feeling.
The balance on my car loan is $8372.17 and under the current terms I have 24 months left to pay. It will be gone before that though. The interest rate is now 6.9%. My question to you is should I pay out my car loan with my LOC which is at 6.5% interest? I am guaranteed the 6.9% interest rate on the loan but on my LOC my rate is prime 3% (which can change at anytime but hasn't moved since Sept 2010) + 3.5%. I was planning to just pay it out but Jane and Finding My Way brought up the point of the interest rate possibly changing. My goal is to pay if off by Dec 2012 or sooner. Do you think it's too risky a move or fairly safe?
And if you haven't already stopped by Jane's blog, Life Doesn't Begin at Reitrement - Life Begins Today! may I recommend you go have a peak. She is biking her way to many cities across the world visiting with different bloggers as she goes. In this post she had a visit to my town.
Thanks for stopping by my blog and thanks for the kind words :)
ReplyDeleteLisa
Woot woot!
ReplyDeleteExciting about your consumer debt.
I really have no advice about the car loan. .4% isn't too much of a difference but every little bit helps. With my luck I would do it and then the LOC would go up. But that's just my luck, I am thinking that the rate may not move for a while but then again who knows?
See I actually have no advice.
You're truly an inspiration in every aspect of your life!! Great work, girl! :)
ReplyDeleteThat's awesome. I didn't even know you could do with cards. I do plan on cutting my credit card once I get my $250 promotion out of it. I agree with your second photo. Me and stress really need to go our separate ways!
ReplyDeleteI'm stopping in for a brief visit from half dozen blog. We live a simple and thrifty life style. My Saturday post was on holiday spending..at the bottom.
ReplyDeleteGood look in paying off your debt...Coffee is on.
Hey girl! I just gave you an award on my blog! :D
ReplyDeleteI thought lowering your available credit leads to lowering your credit score? Maybe that's changed since the last information I've heard. I always kept my available high because I thought it was insurance for a strong FICO score.
ReplyDeleteSince the interest rates on your car loan and your LOC are very similar, and your car loan is a guaranteed rate, I'd leave the car loan alone. Get your LOC paid off, and cancel that out as well.
ReplyDeleteLowering your credit availability will ding your credit score a little bit, for a short time, but once you've begun handling that thing correctly, it'll actually increase it in the long run. Keeping your debt below the 70% of your available is the key to this whole thing.
The credit card company will tell you it'll hurt your credit score. It doesn't matter in the overall, unless you are trying to secure a mortgage in the time you are lowering your availability. In this case, lower the availability and wait to secure the mortgage for a year or so. If that's not possible, don't move your credit availability until after you've gained the mortgage and singed all the paperwork on the house and made your first payment. Then drop the available amount.
If you aren't planning on doing any of these things for the next year or two or three, then drop the limit now. Once my debt is below the $7,000 mark, I'll be dropping my limit to $7,000. It's at a whopping $30,000 (ack!)