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Unread 05-09-2013, 07:13 AM   #16
cyberpyrot
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2012 JK Wrangler 
 
Join Date: Apr 2012
Location: Houston, Texas
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im in a simular boat as you I have a 3 bed 2 bath home , 2012 jeep, 2012 dodge avenger and $350 in crdit card dept.

House is paid off
Jeep is paid off
owe $15,000 on dodge avenger 4 years left on term
$350 floating dept since I live off my Credit cards I pay off the cards every week so I really dont pay interest.
$6,000 in savings.

So essentualy I have $9,000 in dept.

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Unread 05-09-2013, 07:40 AM   #17
0IIIIIII0
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Quote:
Originally Posted by cyberpyrot
im in a simular boat as you I have a 3 bed 2 bath home , 2012 jeep, 2012 dodge avenger and $350 in crdit card dept.

House is paid off
Jeep is paid off
owe $15,000 on dodge avenger 4 years left on term
$350 floating dept since I live off my Credit cards I pay off the cards every week so I really dont pay interest.
$6,000 in savings.

So essentualy I have $9,000 in dept.
At first glance I was like "why the hell wouldn't you just pay off the credit card?!?"

I heard a stat once that the majority of Americans couldn't come up with $2k if given a week. I think that's pretty sad.

Sent from my TJ
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Unread 05-09-2013, 08:13 AM   #18
Monkeybomber
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How'd you get saddled with such a high interest rate on the motorcycle? I bought my JKU 6 months out of college having used a credit card for all of 9 months (credit score of 640) and I was able to snag 3.75%, and I still thought that was too high.

Anyways, if I was you I'd pay off credit card #2 and the bike. It'll take you down to $1375 which is certainly disconcerting, until you realize that you still have assets, just not direct ones. You can sell the bike ($5000), plus another $1000 you can draw on #1 IF the sky is falling. Is there a big purchase you have coming up? Otherwise I wouldn't try to have more than $2000 in a bank at any one time. I'm still paying off my JKU, after which I plan on investing.
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Unread 05-09-2013, 08:29 AM   #19
Munch520
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I would do this, in this order:

-pay down CC 2 to zero (minimize interest output, may help your credit store depending on CC 2's limit)
-pay CC 1 down to below 30% utilization (this will help your credit score)

Once the aforementioned have time to register with the 3 bureaus...

-apply for refi on the motorcycle
-save

A mortgage or car loan are a financial service one is obtaining, and I thus have no problem paying a (reasonable) 'fee' aka interest rate for that service. I'm not over-leveraged (1 mortgage [3.25%], 1 car loan [0%], 1 car owned, $50k savings, $25k IRA) so that's my preference. I would MUCH rather be paying off an asset (house, car, etc.) at a low interest rate than have cash tied up in that asset. Houses, cars, boats, etc. are not always easily sell-able when you desperately need the money for a medical emergency or like occurance. Cash is king and I'll keep as much in savings as I can.
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Unread 05-09-2013, 08:32 AM   #20
Achped
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Quote:
Originally Posted by Monkeybomber View Post
How'd you get saddled with such a high interest rate on the motorcycle? I bought my JKU 6 months out of college having used a credit card for all of 9 months (credit score of 640) and I was able to snag 3.75%, and I still thought that was too high.

Anyways, if I was you I'd pay off credit card #2 and the bike. It'll take you down to $1375 which is certainly disconcerting, until you realize that you still have assets, just not direct ones. You can sell the bike ($5000), plus another $1000 you can draw on #1 IF the sky is falling. Is there a big purchase you have coming up? Otherwise I wouldn't try to have more than $2000 in a bank at any one time. I'm still paying off my JKU, after which I plan on investing.
I was told it was because its used and through Honda. Honda wants to sell new motorcycles (I could've gotten a ~4% rate if it was new) so the interest rates on their used ones are lower.

I'm considering doing this. But right now I've put the motorcycle itself on the chopping block.

I don't have a major purchase upcoming but I'm in my mid-20s. I should be putting money away for the future. There's no need to be rolling around with a bike and new toys like I'm living the high life when I'm really not.

If I sold the bike (and I know I could at least get enough for it to erase my debt) I could pay off both CC's and still comfortably put $2500 in savings. I'd also save $640/yr for motorcycle insurance. Put the money I was going to spend paying off the 0% CC and by the end of the year I'd be up almost $7500.
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Unread 05-09-2013, 08:51 AM   #21
AlTheKillerr
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Location: Star IV
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Im in a similar situation.

600 in CC
1200 loan
2600 on motorcycle

sold the bike yesterday for 3250. the payment/interest on the bikes loan is less than that of the 1200 personal loan. So i will apply the 3250 towards the 1200 loan to erase that. Whatever is left over will go towards the motorcycle loan. I also sold my snap on box for 1,000 which will go into pocket to cover some school expenses till I get my financial aid. once my financial rolls in, ill pay the rest off and send whatever is left over back. Then Ill just make the 10 dollar a month payments on the student loan
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Unread 05-09-2013, 09:05 AM   #22
DougE
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Financial advice from a 68 year old: Pay off the highest interest first. So pay off the $3275 credit card. Then the $5850 motorcycle. Then the $4000 credit card. Charge nothing else and pay cash for everything. Once you have no debt then use credit card only if you pay the full balance each month. If you must charge to get household furnishings or appliances, etc. then pay off as soon as possible. Save where you can but it's OK to buy your toys if its not a stretch financially. So keep the motorcycle. I don't let a dollar get away from me if I can prevent it and then I don't feel guilty with an occasional reward either. Watch Clark Howard on TV and read Scott Burns' column for good basic financial information.
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Unread 05-09-2013, 09:18 AM   #23
Monkeybomber
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Quote:
Originally Posted by Achped View Post
...I'm considering doing this. But right now I've put the motorcycle itself on the chopping block.

I don't have a major purchase upcoming but I'm in my mid-20s. I should be putting money away for the future. There's no need to be rolling around with a bike and new toys like I'm living the high life when I'm really not.

If I sold the bike (and I know I could at least get enough for it to erase my debt) I could pay off both CC's and still comfortably put $2500 in savings. I'd also save $640/yr for motorcycle insurance. Put the money I was going to spend paying off the 0% CC and by the end of the year I'd be up almost $7500.
I'm like you, 23 with $14000 of debt (JKU). I currently have a stable job and have around $2000 of disposable income every month (I live in a horrible area, rent is cheap). I dump about 9% of my salary into a retirement fund annually, but otherwise I'm not sure I see too much sense having piles of money sitting in the bank. I'd rather go with stocks, bonds, assests which have value and I can liquidate, but I feel they have a higher return than a bank account. Could be wrong though, I'm pretty novice at managing my money,
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Unread 05-09-2013, 09:32 AM   #24
TripLeader
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If you really want to keep the motorcycle, can you transfer the loan somewhere else?

I mean there's got to be someplace out there that will give you a better rate than 9.9% on it, right?
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Unread 05-09-2013, 10:55 AM   #25
eagleblue
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$10,500 uncommitted in cash.

$5,850 Motorcycle note at 9.9%
$4000 Credit Card #1 at 0% (for 9 more months) -$5000 limit
$3275 Credit Card #2 at 16% - $5500 limit

I would pay off the two credit cards, then put the bike up for sale. That would leave you with $3,200 in caseh to store away, plus once you sold the bike you would be saving the payment and the insurance. It wouldn't wipe you out of cash. I say pay off your CC's first because their are unsecure. In other words, if you would stop paying on your bike the bank would just come get it. If you stop paying on your CC, they just keep building.
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Unread 05-09-2013, 10:59 AM   #26
bobjp
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Sell the bike and put 100% of the money to the 16% credit card. If after that there is still money on that 16% card, take as much of your savings as needed to pay it off.

You're not making interest on your savings! It makes no sense to carry debt at 16% when you have the money in savings to pay it off!!!

Then save as much as you can over the next 9 months and pay off that other card in full just before interest kicks in.

I know you said your bike isn't a toy, but one of your vehicles is. Unless you're referring to your Jeep as a "car" it sounds like you have 3 vehicles. Lose whichever one is the toy.
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Unread 05-09-2013, 11:03 AM   #27
johnqh
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Pay off credit card 2.
Sell the bike. Buy a bicycle.

Look for another credit card offer with 0% introductory period.
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Unread 05-09-2013, 11:04 AM   #28
johnqh
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You are a student. Can you get a student loan (even if you don't need it)?

Use it to pay off your debt. The student loan will have much lower interest rate than your motorcycle loan and credit cards.
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Unread 05-09-2013, 11:06 AM   #29
bobjp
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Quote:
Originally Posted by johnqh View Post
You are a student. Can you get a student loan (even if you don't need it)?

Use it to pay off your debt. The student loan will have much lower interest rate than your motorcycle loan and credit cards.
This is a good idea if it's viable. Federal stafford loans are interest free until graduation, and then after graduation, interest is low.
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Unread 05-09-2013, 11:36 AM   #30
Achped
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Quote:
Originally Posted by bobjp View Post

I know you said your bike isn't a toy, but one of your vehicles is. Unless you're referring to your Jeep as a "car" it sounds like you have 3 vehicles. Lose whichever one is the toy.
Jeep is definitely the toy, but I doubt I'd get $1500 for it. My dad ran it into the ground while I was in the military. My car is my most prized posession in the entire world. I bought a brand new 2007 Mercedes C230 and paid it off in 3 years by hibernating and having no social life. In fact, the reason I got into motorcycles in the first place was because I wanted to keep the miles down on my Benz (and cuz I'll never make the mistake of buying a brand new vehicle again). Its not a collectible car by any means but I've been driving it for 6 years and its been all over the world with me (literally) and I only have 32,000 miles on it. (My payments were so expensive I couldn't afford to drive it )

Quote:
Originally Posted by johnqh View Post
You are a student. Can you get a student loan (even if you don't need it)?

Use it to pay off your debt. The student loan will have much lower interest rate than your motorcycle loan and credit cards.
I've considered this. I qualify for need-based subsidized federal loans which are interest free while in school and 3.4% once I graduate.

But everyone I've talked to basically views student loans more evil than credit cards. I don't really understand why other than the fact that even bankruptcy won't erase them. 0% for a
couple years sounds pretty good.

Edit: I'm seriously still considering selling the motorcycle. I could get $6,000 for it right this very second from a local dealer. It would make my family a lot happier and my risk for dismemberment would drop dramatically.

But then I think to myself a few months from now. I've got $10,000+ in the bank. No motorcycle. No debt whatsoever.

Regardless, I just paid off the 16% CC.

So now I have ~$7000 to play with, a $5850 motorcycle note and a $4000 interest free CC.

I'm thinking about dropping $1850 on the motorcycle principle (to reduce the amount of interest I pay monthly) paying off the credit card (just because I don't like having CC debt) and throwing $1000 in savings. Then just pay off the bike as fast as I can so I don't have to eat as much interest.
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