Saving $15K with 2 maxed out credit cards totaling $21K in debt does not strike me as responsible use of credit. I would guess credit score is marginal at best. Chase claims it is targeting customers with high balances who have not made much progress paying it down over the last 2 years. AFAIK it has nothing to do with credit score, although who knows.
Best strategy of all might be to keep the cash as a cushion and pay down the loans as agreed. Then if the CC companies change the conditions he can pay them down at that point. In this economy cash is king (hard to borrow without stellar credit), and losing some money on interest might be more desirable than facing a sudden cash crunch.
Of course nothing will work if expenses exceed income. And what happens when interest rates go up in a year or two, with a floating HELOC? Payment goes back up to $700 and expenses >> income. OP needs to post detailed budget for us to pick apart.
|