Getting a loan to pay off three credit cards ($10K)?

[Via]

I can. Obviously, I've been paying them fine, it's just that I'd not be paying them down otherwise.

I believe you.

The thing is - once you get that $ to pay the credit cards off and reduce your monthly obligations down to one lesser payment those little things that got you in to debt will find their way back into your life.

 

[CZroe]

I believe you.

The thing is - once you get that $ to pay the credit cards off and reduce your monthly obligations down to one lesser payment those little things that got you in to debt will find their way back into your life.

I moved cross-country and spent a couple months waiting for a site to open up with my employer. Not sure it applies, though I am considering moving to a family member's home rent-free when my sister/roommate moves to the US Virgin Islands.

 

[CZroe]

But you didn't buy a car, that would be a secured loan on a fixed rate. Your rate would be lower and they wouldn't be able to triple your interest like this. Similarly, buying a house with a variable rate mortgage in a situation where they're free to triple your rate would be irresponsible too.

$10k is quite a bit to carry in unsecured variable rate loans like credit cards.

I wouldn't be carrying it with a $10K loan to pay it off. Wouldn't that factor in to the lender's decision? I would gladly agree to cancel them as terms/conditions of the loan.

 

[jman19]

OP, if you do this, you MUST stop using your credit cards.

 

[Fritzo]

prosper.com

Like the idea of that site, but it seems to be great for people that don't need money and ridiculous for people that do need money.

 

[CZroe]

I still am trying to figure out what you're trying to do with that golden dollar program.

Let's say that I pay $100, $100, and $200 as my minimum payments each month. The majority is just paying interest. If I pay off the $1,500 card, and pay off any charges I make to it in a month, I don't pay interest on it. So, if I buy $1,500 worth of gold dollar coins on it and pay it back before the end of the billing cycle, I won't pay interest on it. If I buy them with that card and use it to pay $1,500 on either of my other two cards and then still made my regular $100 and $200 payments, a lot less of those payments would be goind toward interest and the principle would start going down faster. If I moved it between bot of the remaining cards, I could double the effect. In short, if I borrowed $1,500 instead of $10K, I may be able to pay the remainder off much faster this way. I would be charging $1,500 to each card once per month and paying the same $1,500 + the payments each month before the billing cycles were due. Because I can stagger the billing cycles of the three cards to be a third of a month apart, I might be able to make it work. A side effect will be earning $1,500 worth of purchase rewards on the two Chase cards every month (I don't think my BofA card has any rewards).

 

[Doppel]

Uhh... 10K isn't that much. Err, at least it wasn't before the rate increases.

$10k is a lot when you need a consolidation loan to pay it and when you are not on top of it such that you're unable to see what's going on with the accounts online. The rate increase has cost you at most $2k/year, which is a lot but still only 20% of the entire thing, so you shouldn't pretend that those alone turned this from manageable to not. I think you're in over your head and you don't quite realize it.

Also:

I could juggle the balances using the US Mint Golden Dollar direct mail program so that I can use the money I save in interest charges to pay them all down even faster.

This is just absurd. You clearly are in over your head with this credit card stuff. $10k is a lot of credit card debt for most people, don't kid yourself. Pay your cards down, eat ramen if you have to. You think credit cards are a bit of a game and you're right, but the house wins.

Will banks lend $1.5K at a reasonable rate to someone with $10K of debt on cards that are nearly maxed?

No. Would you?

I still think that you missed at least one payment, hence the interest rate increase. The issuer needs a genuine reason to raise it and you hit the default rate.

 

[pray4mojo]

lendingclub.com

I've invested money onto that site and it's not a scam. Think of it as a bank. Instead of a bank putting their own money into a loan, they have investors like me put money into people that want a loan. Debt consolidation is also the #1 reason people use this site.

Depending on your credit history, I'd say you would qualify for a loan in the ~15% range.

 

[CZroe]

OP, if you do this, you MUST stop using your credit cards.

Of course. I pretty much only use them on Black Friday each year and the only reason they are nearly maxed is due to interest and making barely more than the minimum payments. Now that they are all almost 30% interest, I wouldn't even think of using them again. I gotta get that crap gone.

 

[Doppel]

Let's say that I pay $100, $100, and $200 as my minimum payments each month. The majority is just paying interest. If I pay off the $1,500 card, and pay off any charges I make to it in a month, I don't pay interest on it. So, if I buy $1,500 worth of gold dollar coins on it and pay it back before the end of the billing cycle, I won't pay interest on it. If I buy them with that card and use it to pay $1,500 on either of my other two cards and then still made my regular $100 and $200 payments, a lot less of those payments would be goind toward interest and the principle would start going down faster. If I moved it between bot of the remaining cards, I could double the effect. In short, if I borrowed $1,500 instead of $10K, I may be able to pay the remainder off much faster this way. I would be charging $1,500 to each card once per month and paying the same $1,500 + the payments each month before the billing cycles were due. Because I can stagger the billing cycles of the three cards to be a third of a month apart, I might be able to make it work. A side effect will be earning $1,500 worth of purchase rewards on the two Chase cards every month (I don't think my BofA card has any rewards).

I read this twice. I am not stupid but you just made my head hurt. You should realize that credit cards' interest is accrued daily once you get past the grace period; it's not like you can take a card with $5k owed on it, plop $5k in on Wednesday, then out that $5k by Thursday and magically reset it for a month; you've merely bought yourself a day. I think you need to run your numbers again, this sounds like magic the way you describe it.

 

[CZroe]

Well, it's not as bad as I thought. My existing balances in my Chase cards are not at 30%... only new purchases would be (like the dollar coins). That's not going to happen then. They are at 15%. Their website is still having problems so I can't thoroughly research everything I would like.

I read this twice. I am not stupid but you just made my head hurt. You should realize that credit cards' interest is accrued daily once you get past the grace period; it's not like you can take a card with $5k owed on it, plop $5k in on Wednesday, then out that $5k by Thursday and magically reset it for a month; you've merely bought yourself a day. I think you need to run your numbers again, this sounds like magic the way you describe it.

I'm not saying it will work. I don't know that it's feasible. The idea was first to simply use the lower-interest CCs to reduce the principle on my highest card and then focus on paying those down. I'm saying that if I can pay off the $1,500 card then use it like others on AT say to use a CC: Charge to it and pay the balance off before the billing cycle is over. By charging US dollar coins, I can use the cash to have a second card enter the next billing cycle at $1,500 less than it would have. I can then charge $1,500 on that card to pay the first one before it's billing cycle comes due and do the same thing to pay the second. It gets complicated when Because I can set the due dates, I can manipulate the

I can use it to enter the new billing cycle on each successive card with a balance that is $1,500 lower than it would have been which will potentially save a lot on interest every month.

I'm not going to be doing this, especially now that I know it isn't as bad as I thought. I was just curious. I am going to be paying as much as possible on my BofA card each month.

 

[Bignate603]

Let's say that I pay $100, $100, and $200 as my minimum payments each month. The majority is just paying interest. If I pay off the $1,500 card, and pay off any charges I make to it in a month, I don't pay interest on it. So, if I buy $1,500 worth of gold dollar coins on it and pay it back before the end of the billing cycle, I won't pay interest on it. If I buy them with that card and use it to pay $1,500 on either of my other two cards and then still made my regular $100 and $200 payments, a lot less of those payments would be goind toward interest and the principle would start going down faster. If I moved it between bot of the remaining cards, I could double the effect. In short, if I borrowed $1,500 instead of $10K, I may be able to pay the remainder off much faster this way. I would be charging $1,500 to each card once per month and paying the same $1,500 + the payments each month before the billing cycles were due. Because I can stagger the billing cycles of the three cards to be a third of a month apart, I might be able to make it work. A side effect will be earning $1,500 worth of purchase rewards on the two Chase cards every month (I don't think my BofA card has any rewards).

If there are any gains, they will be small. However, the risk of screwing up and losing money on the deal is quite large.

Of course. I pretty much only use them on Black Friday each year and the only reason they are nearly maxed is due to interest and making barely more than the minimum payments. Now that they are all almost 30% interest, I wouldn't even think of using them again. I gotta get that crap gone.

So either you bought thousands of dollars of stuff over many years and didn't pay enough to make a dent in it, or bought a huge amount all at once and haven't done anything to make a dent in it. You REALLY need to rethink how you're using credit. If you can't change your spending habits it's probably time to close the accounts.

 

[CZroe]

If there are any gains, they will be small. However, the risk of screwing up and losing money on the deal is quite large.

Agreed.

So either you bought thousands of dollars of stuff over many years and didn't pay enough to make a dent in it, or bought a huge amount all at once and haven't done anything to make a dent in it. You REALLY need to rethink how you're using credit. If you can't change your spending habits it's probably time to close the accounts.

They were mostly 0% transfers but, like I said, the offers stopped coming through around 2008 and the promotions eventually expired. That's when I closed my empty accounts and started "maintaining." Since then, I usually have them about half paid down by the holiday shopping season and, like many people, I used them to cover the holidays. I couldn't do that again if I wanted to, so I have "stopped." Even if they were paid down by November this year, I'm not putting anything on them at 15-25% interest.

 

[lothar]

Let's say that I pay $100, $100, and $200 as my minimum payments each month. The majority is just paying interest. If I pay off the $1,500 card, and pay off any charges I make to it in a month, I don't pay interest on it. So, if I buy $1,500 worth of gold dollar coins on it and pay it back before the end of the billing cycle, I won't pay interest on it. If I buy them with that card and use it to pay $1,500 on either of my other two cards and then still made my regular $100 and $200 payments, a lot less of those payments would be goind toward interest and the principle would start going down faster. If I moved it between bot of the remaining cards, I could double the effect. In short, if I borrowed $1,500 instead of $10K, I may be able to pay the remainder off much faster this way. I would be charging $1,500 to each card once per month and paying the same $1,500 + the payments each month before the billing cycles were due. Because I can stagger the billing cycles of the three cards to be a third of a month apart, I might be able to make it work. A side effect will be earning $1,500 worth of purchase rewards on the two Chase cards every month (I don't think my BofA card has any rewards).

How exactly is this supposed to work?
If you carry any balance at all and don't completely pay off in full, you have no grace period whatsoever, period.
It doesn't matter if you're paying the minimum payment or not, you still don't have any grace period.

Buying $1,500 worth of coins on a CC you're already carrying balances on seems stupid since the CC company will charge you xx% interest daily from day 1 of the purchase because you officially have no grace period.

Unless the particular card you're using for this doesn't carry a balance and is completely paid off at the end of each billing cycle, this idea won't work.

 

[lothar]

I've actually been tempted to balance transfer one of my cards. I don't know if this is standard practice in the banking industry, but my card has auto-pay, which only lasts for two years each time you set it up. There's no notice given to you when it's about the expire, and I actually had it lapse on me without realizing it. But it makes me wonder... two years seems to be a decent amount of time for someone to forget about something, so could they do that try and catch people into forgetting to renew their auto-pay so they make a late payment? Seems like a viable and completely legit strategy.

EDIT:

I've heard a lot of good things about the Chase Freedom card, so I was thinking about applying for one of them to try and do a balance transfer. Although, the last Chase card I had (Sony Style card -- used to get the PS3 for $250), they canceled it on me out of the blue because I never used it. That ticked me off because I had a good amount of Sony Points on it still. :\

None of mine do that. Once I set it up, it's permanent unless I change it.
What bank/CC company do you use so I can avoid them in the future?
I know it's definitely not PenFed, American Express, US Bank, or Citi because I have those cards.

 

[sdifox]

Wow.
Just Wow.
You Sir are the first EVAR ATOTer to actually admit OWING money on a Credit Card!

Everyone else pays their balance EVERY month & get thousands of dollars back every year. Heck, they don't even have to work 'cause the CC companies give them so much cash just for using their card.

lulz

I hated having to borrow money to buy the house, but there was no avoiding it. 200k mortgage, paid it off in 8 years.

 

[masterxfob]

sad to admit it, but i've been there, and done that. at one point i was juggling $35k in credit card debt. i ended up calling my credit card companies and worked out what was essentially a buyout. sure, it hurt my credit, but life was a lot less stressful after i got rid of those payments.

after that, i learned how to manage my money better and resisted making those impulse purchases. probably one of the worst experiences i've ever been through, but also one where i learned quite a bit as well.

 

[CZroe]

lendingclub.com

I've invested money onto that site and it's not a scam. Think of it as a bank. Instead of a bank putting their own money into a loan, they have investors like me put money into people that want a loan. Debt consolidation is also the #1 reason people use this site.

Depending on your credit history, I'd say you would qualify for a loan in the ~15% range.

Signed up. I used your email listed in your profile as the referrer. I hope you can get your $100. I selected $4,800 at 3 years ~16% interest. That's enough to pay off my 25% interest BofA card and most of my 18% interest Chase card. The remaining one is 16% of only $1,500, which should be a cake-walk after the other two consolidations. I'm selling all my non-essentials ASAP to accelerate this. Bye-bye gaming PC and 65" LCD! I couldn't bring those with me cheaply anyway.

 

[RaiderJ]

http://www.fatwallet.com/forums/finance

Second that. I've found some great credit card deals there. I've also borrowed money on Prosper.com, and do some lending there as well.

 

[postmortemIA]

Wow.
Just Wow.
You Sir are the first EVAR ATOTer to actually admit OWING money on a Credit Card!

Everyone else pays their balance EVERY month & get thousands of dollars back every year. Heck, they don't even have to work 'cause the CC companies give them so much cash just for using their card.

nope. they owe ME money - I pay all balance each month and then some !



j/k

 

[Born2bwire]

Let's say that I pay $100, $100, and $200 as my minimum payments each month. The majority is just paying interest. If I pay off the $1,500 card, and pay off any charges I make to it in a month, I don't pay interest on it. So, if I buy $1,500 worth of gold dollar coins on it and pay it back before the end of the billing cycle, I won't pay interest on it. If I buy them with that card and use it to pay $1,500 on either of my other two cards and then still made my regular $100 and $200 payments, a lot less of those payments would be goind toward interest and the principle would start going down faster. If I moved it between bot of the remaining cards, I could double the effect. In short, if I borrowed $1,500 instead of $10K, I may be able to pay the remainder off much faster this way. I would be charging $1,500 to each card once per month and paying the same $1,500 + the payments each month before the billing cycles were due. Because I can stagger the billing cycles of the three cards to be a third of a month apart, I might be able to make it work. A side effect will be earning $1,500 worth of purchase rewards on the two Chase cards every month (I don't think my BofA card has any rewards).

I keep reading this and I still have no idea what you're trying to do. For God's sake, what are you going to do with 1500 dollar coins in the first place? You obviously need to spend the money to make this thing work and as the US Mint states on the program's website,

The immediate bank deposit of $1 coins ordered through this program does not result in their introduction into circulation and, therefore, does not comply with the intended purpose of the program.

Doesn't mean you can't do it but I doubt you can really get away with trying to deposit 1500 of them in one go.

 

[CZroe]

How exactly is this supposed to work?
If you carry any balance at all and don't completely pay off in full, you have no grace period whatsoever, period.
It doesn't matter if you're paying the minimum payment or not, you still don't have any grace period.

Buying $1,500 worth of coins on a CC you're already carrying balances on seems stupid since the CC company will charge you xx% interest daily from day 1 of the purchase because you officially have no grace period.

Unless the particular card you're using for this doesn't carry a balance and is completely paid off at the end of each billing cycle, this idea won't work.

You don't on the existing balance but you do on new purchases. Let's say that I have three cards and one has a $0 balance and a $250 limit while the other two have $500 balances with $500 limits and $50 minimum payments of which $40 is interest. I purchase $250 on the card with a $250 limit and pay $300 on my first $500 card just as the billing cycle closes. It doesn't matter what I charge after I enter the next billing cycle on that ssecond card: if I can get the balance back to that point before it closes again, I will be charged interest on only $200 of the balance. Now, under $20 of the $50 I added to it is interest. I use card number two to buy $250 for card #3 that has it's billing cycle closing soon after. I put $300 on it too. After entering the new billing cycle, I purchase $250 in coins and put them on the original card before it's billing cycle has finished, returning the balance to $0 before I was ever charged interest. It likely would not work but I just thought it was worth thinking about and confusing myself and everyone over.

 

[CZroe]

I keep reading this and I still have no idea what you're trying to do. For God's sake, what are you going to do with 1500 dollar coins in the first place? You obviously need to spend the money to make this thing work and as the US Mint states on the program's website,

Doesn't mean you can't do it but I doubt you can really get away with trying to deposit 1500 of them in one go.

Of course you can. It's legal tender. Not only that, but I would be circulating many of them (all the things I normally use cash for) and supplimenting with cash from my paycheck. There would be more circulating, unlike the CC rewards scammers. Also, I wasn't really thinking of starting out doing $1,500. That was just the maximum possibile. I was thinking more along the lines of one order of $250. It would still be significant.

 

[OBLAMA2009]

$10k isnt that much money if you are employed. if i were you i would just pay it off asap

 

[alkemyst]

$10k isnt that much money if you are employed. if i were you i would just pay it off asap

That's sort of rich...most live pay check to pay check.

OP there should be some reason you got rate bumped like that. You are not being honest with us.

My bank screwed up my mortgage. It's been messed up for 2 years now (I have an attorney and have done all the clerical stuff, this is not about that). Some of my credit lines went through the roof due to the reporting.

I had excellent credit and have a better than average income, I was able to easily get an unsecured loan for about $10k at 7% from Discover.