Lowering Rates?

flysquirrel1972 · #1 (**permalink**) 09-24-2007, 07:11 PM

I was wondering if anyone could help me in reducing my credit card rate? Currently I have a credit card with Bank of America and after I missed a payment by 2 days it went from 19% up to 28% I did not notice till I noticed my minimum payment doubled. I got an offer in the mail from Bank of America to do a consolidation loan with a low % rate. So I called and asked what they could do for my current credit card and I talked them down to 17.99% better but I think I could do even lower. Also Bank of America gave me 3 months of no payments. I have a 733 credit score and that is the lowest of the 3 scores but my debt to income ratio is rather high.

I owe the following:
Bank of America - $15,000 @ 17.99% Max 25,000.00
Best Buy - $1750.00 @ 0% Max $2000.00
Chase - $6000.00 @ 6% Max $8500
WauMu (home loan) 192,000 @ 6.8% interest only 5 year ARM

I make just about $58,000.00 a year (I’m in sales)

What is my best bet in getting that $15,000 % lower?

Would doing a Refi be smart? I don't think I have much equity in my house right now with the market the way it is.

I am currently working as hard as I can to get myself out of debt by doing the snow ball debt elimination. Next month I'll have my car completly paid off then I will work on the next debt.

Please any suggestions would be great.

Thanks in advance

Hermes · #2 (**permalink**) 09-26-2007, 08:32 AM

I know a few people who decided to take out a loan from their bank to pay-off their high credit card debt with one payment. The interest rate was less then half the rate on the CC but you really just trade one debt with another one. I don't know if that is something you want to do.

If your main goal is to lower interest that could be an option. Should you consider that option I would only do it for the BoA CC. It won't solve the problem of your overall debt as you trade 15k at BoA with 15k from another institution.

I wouldn't recommend to do a ReFi.

How much disposable income do you have? How about liquid assets?

Some people decide to invest their way out of debt rather then pay their way out of it but that depends on personal preference.

It seems as if you chose to pay your way out if it. Make a debt re-payment plan (if you don't already have one). Pay the debt which carries the highest interest first and try to free up as much cash as possible until the debt is paid off.

flysquirrel1972 · #3 (**permalink**) 09-26-2007, 05:47 PM

Hermes

Thanks for the info! I am in sales so one month I could have a large pay check and one month I could have a small paycheck. Now that I have a plan my goal is to pay it down as fast as I can but I want to have my minimum payment be as low as possiable incase I have a tight cash flow that month. I am pretty much at this point living pay check to pay check which I am in the process of changing now that I have a plan. Thanks for the input!!

Squirrel~

Hermes · #4 (**permalink**) 09-27-2007, 10:56 AM

No problem.

Make sure you stick to your plan. Many people have plans in place but after a few weeks or months forget al about their plan.

Good luck!

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