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How do I pay this stupid credit card off?*

The balance is $5926 with an interest rate of 19.99%. Should I try to get a personal loan with set payments? Would I be able to get lower interest? My credit is pretty good. It is going to take me forever to pay this off. And I want to move out and get my own place. I will also be getting $3,000 in the next month. That is all I have saved up. Do I save the 3,000 or put it towards credit card? I wanted to use $3000 to try to buy a house. ?????

Answers:

1) I would suggest, for the time being, pay the minimum on your card. The balance is too high to chip away at and get anywhere. Place the 3k you are getting as a down on a house, buy this house on foreclosure. As soon as you have an established history with your home apply for a HELOC ( Home Equity Line Of Credit). Take the money you get off the HELOC and pay off your credit card. Then, chop your card up and pay off the HELOC over time.

2) pay the card the $3,000 and then see about a fixed note for the rest. You are not ready to buy a home as you have no Money saved up and $3,000 is going very far in the real estate market now is it. I am a mortgage banker in TN & KY

3) Pay down the credit card with your $3,000. Live like a monk until you've got that debt down to zero, at which point you can start saving toward moving out. Put yourself on a strict budget and don't use the credit card for *any* new purchases. Use cash, check, or debit card only, and always know how much you have left until your next payday. A debt load of nearly $6,000 at almost 20% interest in horrible. Get rid of it and never let it build up again. Once you owe nothing, charge only what you can pay in full when the bill comes.

4) You need to apply the 3k towards your credit card. You should wait to buy the home when that is paid off & you have more money to put down on a home.

5) Wel...the card didn't rack up these charges on it's own. Pay the $3000 towards the card. $3000 is not going to buy a house.

6) Banks want 10% down and excellent credit or 20% down. Save, save, save, save. Excellent credit means no balances on your credit cards. Pay them in full each month.

7) You don't have enough money to buy a house. I would put the $3000 toward the credit card, or if that is ALL your savings, i would save $1000 for emergencies and pay $2000 on the card. Call your credit card company and ask if they will lower your interest rate. I did that recently and went from 22% to 11.9%. Don't take out a loan to pay off your credit card. Since you want to buy a house, you need to stay away from loans and credit cards until you are ready to take out a loan for the house. Rigfht now the market is too weak for you to get a loan for your house with only $3000 in the bank and $6000 in credit card debt. Work down the debt, get about $20,000 in the bank and go for the house. You always want some extra money in the bank to cover your morgage payments for a few month in case of hard times or your lose your job.

8) In this economy having some liquidity (cash on hand) for you or your parents is as important as lowering your balance and interest, so I would not take all you have and use it to pay on the card. First, I suggest writing the credit card company and requesting that your credit card rate be lowered if your credit is as good as you perceive. If that is impossible, cancel the card and continue to make the payments or at minimum look for a better interest rate card to which you can transfer the remaining balance and/or have your card limit lowered. Do not have one card with a high limit. Be aware that the amount of credit available to you affects your credit rating just as much as timely payments. Read up on debt to income ratios. Plus, if the outstanding debt balance of your card is more than 50% of your limit it hurts your rating. Universal default APR whereby the cards raise your rate on all cards if one is late is a tactic by the credit card companies that cause your rates to skyrocket so be extra cautious. To pay down the debt faster, practice paying cash first and you'll discover it is cheaper to save up and pay regular price than on sale with 20% interest. You would walk away if they added 20% at the sale, right, and that's just once and this is 20% every month. Make sure when you make a credit card payment, your payment is more than the minimum due by this formula-- take the minimum and add in the finance charges and the interest charges, any late and overlimit fees or any annual fee. You will then not be paying interest on interest, or what's called compounding and the rate is less important. Be sure to read the fine print with any card and pay attention to what happens if a payment is missed and so forth. The key is not to add any more to any balance. You'll need a credit history to buy a house so having had a credit card and showing a consistent repayment pattern is helpful. Living at home just means someone else is taking up the slack so you'll need to factor in that slack amount in your budget for moving out into a rental or a place you can afford and own. Being at home is the best time to learn. Consider paying "rent" to your parents who could put it in a CD or some other interest-bearing resource that you can have back when you are ready to move out. That'll help you to experience what you'll truly need to be self-sufficient. Good luck. Hope you are in school and this helps in the meantime.

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