hello everyone
i am in a situation where my wife and i need to pay of our credit cards as we have a baby due in 3 months.
we have 2 credit cards totalling $10,000 that i think we need to pay off.
my question is we have about $90,000 in equity and have been approved for a $13,000 top up which will pay off all credit cards and the rest can be pu back into the loan.
does anyone think that this is a terrible idea or are there major ramifications for doing this?
we havr been trying to pay of these cards for 1.5 years now with no success.
any thoughts?
thanx
If you use your top up to pay off your CCs AND CONTINUE TO PAY the credit card payment but onto your home loan, you will be better off. Dont forget though, if you only pay the minimum you may end up paying more in total as it is over a much longer time frame, althougth it will be easier week to week.
PS pay it off then cut it up (or at least reduce the limit ot the minimum)
All the best , Mick
thanx for the reply. our mission is to pay off one card which has $4500 owing and then cancell that account.
this leave us the 2nd credit card which we will pay and then reduce the amount of credit.any extra will go on the mortgage.
so you think that this is a good idea then?
any other comments.
Where's the equity coming from? Presumably not your PPOR because borrowing that to pay down the mortgage would be… well, unproductive to say the least. If you're borrowing against an IP to pay down your PPOR mortgage, be aware that you cannot then claim a deduction for this portion of the interest payments, so again, I can't see the logic.
Did I misunderstand?
Cheers, F. [cowboy2]
i do not know what you are talking about foundation.
the equity is that my ppor has gone up in value and i am accessing a portion of it to pay of the card debt.
or were you replying to another thread.
sounds odd.
Gday doublek!!
Sounds like the way to go from my experience, i know what its like to have credit card debt hanging over your head, i agree with the first reply that you should use some equity to pay off the credit cards, then cut them up, or lower the limit. I have been through a similar thing, and its hard to sleep at night worring how you are going to pay them back!!! if you are looking for alternatives maybe try and set up a line of credit and pay them with that??? just a thought!
newbi2 wrote:If you use your top up to pay off your CCs AND CONTINUE TO PAY the credit card payment but onto your home loan, you will be better off. Dont forget though, if you only pay the minimum you may end up paying more in total as it is over a much longer time frame, althougth it will be easier week to week.PS pay it off then cut it up (or at least reduce the limit ot the minimum)
All the best , Mick
I agree with Newbie, you need to keep paying the same amount that you were paying into the ccs, but put it in the home loan. If you just pay the minimum payment it will end up costing you much more.
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thanx for the comments.
i will go for the top up and make sure that i put extra into the home loan after the credit cards are payed off.
"and make sure that i put extra into the home loan"
Perhaps I did not make myself clear. Let's try this instead:
thanx for you're questions doublek.
take mortgage to pay the mortgage.
sound good tko me?
no i don't.
There, that should be sorted. Regards, F. [cowboy2]
Another option – take up one of the offers by a bank to transfer your credit card balance to a new card for a 0% or greatly reduced rate. Cut up the card and pay the balance back ASAP within the interest free/reduced interest period. Don't use this credit card…
yeah Scott I have thought of this as well but decided to stick with what I will do.
Foundation, the bank will give me a minimum of $10,000 for the top up but to cover the interest that builds as it is getting processed, they give you a little more.
The extra that I receive after the cards are payed off go back into the mortgage.
Does this make sense buddy.
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