UnThreaded | Threaded | Whole Thread (10) | Ignore Thread Prev | Next
Author: pwyles Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308881  
Subject: Re: Getting rid of the credit cards Date: 4/28/1999 5:06 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
<<Thinking of using a home equity (bill consolidation) load with Providian to pay off all my credit cards...which is around $20,000. The deal with this company is that the rate is 7.5% plus the prime rate which is around 2.25%...therefore the "floating rate" is currently at 9.75%. That is half of what my current APR is with all of the credit card companies!! However, I am not too familiar on how volatile the prime rate has been over the past several years. To my knowledge with the economy doing so well, the prime rate has been very stable. Have we ever seen the prime rate above 7 or 8% over the past 5 years? Anyone have any good or bad experiences with this type of loan? This loan goes for 15 years and can be paid off at any time without any penalties.>>

Time Out! First Down! Prime rate is 7.75% today. What the loan rate they offered you prime (7.75) plus 2.25%? As far as volatility of the primerate is concerned that depends on What the Federal Reserve/Alan Greenspan says. The Federal Open Market Committee meets about every two months among other things they talk about what they want to do to the Discount Rate, and the Federal Funds Rate. If either rate goes up Prime goes up, if either goes down Prime MAY jgo down. The Federal Reserve uses the two rates to control how much money is available and hence control inflation. If you want a better description than that basic overveiw you will need to find someone with a much better understanding than me.

I agree with Leviathan a consolidation loan won't help one bit until you control spending, and spend less than you make. You can't borrow your way out of debt, the the only justifications for a consolidation loan are so you can only make one payment, and to get a better rate so you can get to zero debt faster. A consolidation loan is NOT so you can "free up" space on a credit card so you can buy more.

~~paul
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (10) | Ignore Thread Prev | Next

Announcements

TMF Credit Center
The Motley Fool Credit Center arms you with real tools and simple messages, that will help you in every credit situation.
Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Dividend Growth Investing

Good Time for Dividend Champions?
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement