Today when I was at the bank they told me that I was an pre-approved for a LOC and a credit card. I was surprised since I do very minimal banking with this institution. In fact, I only use it so I can give money to my parents or so they can give to me. My home town only has two banks to choose from.
After sitting down with one the banking reps and asking a number of questions I have decided to take the LOC and use it to pay off my credit card. The interest rate is prime + 3.5 (6.5% in total) which she tells me is a really good rate. I'm not sure about that but it is better than the interest on my credit card so it means a little extra to pay it off sooner.
My plan doesn't change. I'm still going to pay it off ASAP and my goal is still the end of March 2012. The other thing is that once the credit card is paid off I will probably pay out my car loan with the LOC and continue to do the same thing as planned in terms of pay off. The interest rate doesn't change much (only 0.5%) but it seems like it would just be easier.
Does this sound like a wise plan or is there something I'm not thinking of?
Lower interest is great!! And you are bound & determined, so I think this is a good thing! :)
ReplyDeleteSounds like a great plan. Plus lower interest is always good
ReplyDeleteThat is good and you have the discipline to use it correctly.
ReplyDeleteSaving money on interest makes it worthwhile.
ReplyDeleteThis is a good plan. One payment is better than multiple payments.
ReplyDeleteSounds like a good plan - makes sense to me. :-)
ReplyDeleteIs that a fixed rate or a variable rate? A variable rate can go up (or down) at any time, however, I don't think the rates are going to change any time soon!
ReplyDeleteDitto Jane's question. SEcond - when that credit card is paid off, freeze it in the freezer...way down deep in the bottom and leave it there. If it's your only card, and you aren't sold on going completely without, that is.
ReplyDeleteSaving yourself money on the interest side of things will feel great when you can say "this is how much I was able to move to other things once my debt is gone".
Amazing! Good for you for asking all those questions and making an informed and conscious decision with this. Having one payment instead of three is a great way to feel like you are making progress even if you've just moved the numbers around. It's also much easier to track when it's only one payment!!
Just think - in 3.5 months you'll be DONE WITH YOUR DEBT!!