What should I do with these rates?
Tags: balance transfer, Home Equity Loan, interest costs, loan balance, visa balance
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on Monday, October 5th, 2009 at 3:31 am and is filed under best home equity loans.
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The interest you pay from a Home Equity Line of Credit is deductible. Also, the rate on this kind of loan fluctuates, so be prepared to pay less or more depending on what the Fed does; i.e. lowers or raises the prime rate. As well, most HELC have an early pay-off penalty fee, but usually do not have a "balance transfer fee."
The introductory offer from the Discover card sounds nice, but if you have to transfer some kind of balance to it, you will have to pay a transaction fee, which could be anywhere from 3% to 5% of the amount transfered. Also, you want to make sure the rate stays at 8% and doesn’t go up the following year. To reduce this debt, pay more than the minimum required payment. Can you not afford to pay $10 or $20 more per month? Make it $100 if you can.
The Visa rate sounds disgusting. I would never use that card. The best thing to reduce this debt is to transfer the balance to a better card if you can.
The best option seems to be the Home Equity Line of Credit. You can deduct the interest paid on it and there are no balance transfer fees. The best reason if that the rates don’t usually go from 8% to 30% like how they do on credit cards. All in all, credit cards just suck.