As I mentioned a few posts back I created accounts on Mint and Credit Karma. From what I can tell I have a few options and things I need to consider. I need to reduce the interest I am paying on my debt in order to get it paid back in a reasonable amount of time. I also want to lower my payments, and oddly my credit score should improve if I take out more credit (not more debt) and diversify my credit in order to reduce the percentage of credit I am using and prove my ability to pay back multiple forms of credit.
For months/years I have received pre-approved offers for personal loans and credit transfers. I am working on determining the pros and cons of these two options.
- Zero interest for 6-18 months feels like a great deal
- Con- if I can't pay the full amount in 18 months the interest come back to get me
- pro- I could possibly do a follow-up transfer of the remaining amount before the interest kicks in
- Con- the market could change in 18 months and I might not be eligible for the second transfer
- Con- if I use the card for anything else, the payments I make will go toward the new balance not the old, so I can't use the card at all
- pro- I don't plan to use the card and I have other cards I could use if I NEED to, but only if I need to
- Con- balance transfer fees
- More time to pay but has interest the entire time
- Con- interest
- Pro- much lower interest than I have now
- Con- It is a set amount, I can't save money by paying it faster, it is what it is once it is set
- the interest is lower so the set amount is lower in the long run
- Pro- it diversifies my debt
- Con- I have never had a personal loan and new things scare me (that is a fake con- me being scared isn't a valid reason to not make a wise financial choice)
- Pro-it moves me to only paying one payment each month (less payments to think about means fewer chances for me to miss a payment)
Things to think about:
- How much can I afford to pay?
- How fast do I think I can reasonably pay it?
- How will it impact my credit?
Even though I really love the idea of zero interest I am leaning toward having more time to pay and diversifying my debt. Also, the zero interest plan does require I pay a transfer fee and that might end up being really close to the interest I would pay with the loan.
Now, for todays photo: Today is a dreary day and I need to spend all of it indoors cleaning my room. Therefore, there will be no selfie. I am wearing 9+ year old velour pants and an overpriced striped t-shirt, but my dog is really cute all wrapped up in my blankets.
This is Ella, she is my favorite.
Please note: I am not a credit councilor, and I am not giving you advice. I am talking about what I am doing to figure out my credit/debt situation.