3
Had to choose between a high-interest personal loan or maxing out a card for a plumbing van repair
My work van's transmission went out in Phoenix last month, and the quote was $4,200. I had the choice of taking a 24% personal loan from my bank or putting it all on a card with a $5,000 limit. I went with the loan to keep my credit utilization low, and my FICO score only dropped 12 points instead of the big hit I was worried about. Anyone have a better move for a similar emergency cost?
3 comments
Log in to join the discussion
Log In3 Comments
lucas4981mo ago
You say "it's a win," but I see it differently - 24% interest on a loan is brutal, and it's going to cost way more than a temporary credit score dip if it takes a while to pay off. Keeping that card utilization low is smart for future rates, sure, but not if you're bleeding cash on a high-interest loan right now. I'd rather take the credit hit and then hammer the card down fast than lock myself into that kind of interest rate (especially in Phoenix, where everything already costs more).
6
wyatt7713mo ago
So you paid a 24% rate just to keep a number on a website happy? Brian's right, it's a win, but man, that's a pricey win. Next time maybe just sell a kidney, I hear the market's decent.
0