Quote:
Originally Posted by ksluis62
willowstudios, your plan sounds pretty reasonable to me, as long as you are committed to applying the freed up payments to the credit card debt. The unsecured debt hurts your credit more than secured debt, but mathematically, it makes more sense to pay down high interest debt first, which is your auto loan right now. Once your CC debt resets to 12%, hopefully the balances will be down $6k from where they are now. You'll have other options with a fully paid car, like selling it and/or downsizing if needed, or even taking out a loan against it if the rate makes sense. You might also get other low interest balance transfer offers between now and next Feb.
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I disagree with this approach. CC companies are changing terms on people all over the place. Auto loans are fixed. The CCs are time bombs. If he pays off the car and the CC companies decide to change the terms he is screwed. For instance Chase is currently tripling minimum payments on some cards, or eliminating low fixed APRs on some cards. It's also unlikely he'll get BT offers with that level of debt (very high credit utilization ratio).