Personal Finance

Apply LOC or Apply new CC with 0% Balance Trf?

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  • Aug 30th, 2012 10:29 am
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Jr. Member
Feb 26, 2003
172 posts
2 upvotes

Apply LOC or Apply new CC with 0% Balance Trf?

Seeking some advise.

Credit Score: 666
Debt: Visa - $4500 ($5000 Limit)
MC - $4500 ($5000 Limit)
OSAP - $20K
Car Loan - $26K
Asset: None.
Saving: None.
Income: $46K

Looking to get a loan at least $5K - $20K.... Which way should I go for?
Apply unsecured LOC? or go for 0% Balance Trf Credit card?
Which bank is easier to get unsecured LOC??
15 replies
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User avatar
Feb 15, 2008
26318 posts
3242 upvotes
Calgary
Ummm, sounds like you're a bit of a credit junkie. Best to think about nipping your problem in the bud while its still within the realm of possibility of actually fixing it.
Jr. Member
Feb 26, 2003
172 posts
2 upvotes
No body want to be a credit junkie but need the money for family.
Member
User avatar
Jan 2, 2008
232 posts
58 upvotes
Calgary, AB
Here is what I did.

I got a LOC, transfered my CC balances to there.
Use the LOC as a free checking account - paychecks deposited, bills auto withdraw from there
Got a 0% CC and transfered as much of the balance as possible there.
Goal, make sure the balance on the LOC goes down every month.
Also got a cash back credit card, use it for EVERYTHING possible. Always pay it off before intrest comes due with the LOC.

It requires disipline to make sure your LOC goes down every month, and not to pay any intrest on the cashback CC. But worth it for me at least.
Jr. Member
Feb 26, 2003
172 posts
2 upvotes
I worry that is not easy to get a $10k LOC...
Deal Addict
User avatar
Jul 28, 2011
1146 posts
246 upvotes
Vancouver, BC
Hata wrote: I worry that is not easy to get a $10k LOC...
Yeah with that much debt, you'd need some decent liquid assets to qualify for 10k unsecured line of credit.

Nyd
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Nov 2, 2003
17117 posts
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GTA
Hata wrote: No body want to be a credit junkie but need the money for family.
total *****. you're making $46k and you got a $26k car loan? come on.

the first step is to admit you have a problem managing your finances / credit.

you don't need more credit. you need to live within your means.
Deal Addict
Jul 18, 2005
2458 posts
916 upvotes
Toronto
Agree with FoxmanFX. Try to get a LOC in the same amount that you owe your two CCs and try to pay it off as soon as possible. If you can get it at 3.5% your much better off than paying interest on your CCs. If this is not a possibility, get a 0% balance transfer to a new card but make sure you pay it off before the 0% term is done.
Deal Guru
Aug 14, 2007
12807 posts
3837 upvotes
--
Hata wrote: Seeking some advise.

Credit Score: 666
Debt: Visa - $4500 ($5000 Limit)
MC - $4500 ($5000 Limit)
OSAP - $20K
Car Loan - $26K
Asset: None.
Saving: None.
Income: $46K

Looking to get a loan at least $5K - $20K.... Which way should I go for?
Apply unsecured LOC? or go for 0% Balance Trf Credit card?
Which bank is easier to get unsecured LOC??
OP my gf is in a similar situation just her debt is not as high.

Honestly if you can, throw $500+ at your debt every 2 weeks

Using an loc is good but be very careful.

I don't think you'll get an unsecured loc at less than 6% either way and with that much debt, I don't think a bank will give you a loc... Think about your OSAP loan this way, as long as you finished school, it is good debt but the other stuff is not. I'm assuming you bought a brand new car? could have saved at least $10,000 buying a used off lease one
Deal Addict
Jan 19, 2011
3208 posts
1526 upvotes
Hata wrote: Seeking some advise.

Credit Score: 666
Debt: Visa - $4500 ($5000 Limit)
MC - $4500 ($5000 Limit)
OSAP - $20K
Car Loan - $26K
Asset: None.
Saving: None.
Income: $46K

Looking to get a loan at least $5K - $20K.... Which way should I go for?
Apply unsecured LOC? or go for 0% Balance Trf Credit card?
Which bank is easier to get unsecured LOC??
Your credit score is pretty poor all things being equal, and it may be a challenge to get a loc, if not impossible.

I would probably be watching a few episodes of 'til debt do us part' and taking some cues from Gail Vaz Oxlade...

Right now you want to cut all unneccesary expenses to the bone, select the highest interest credit card, and pay absolutely everything you have on that, while making minimum payments to anything else. once that is clear, work on the next credit card.

My wife and I had three properties with about 600k in equity, plus a little less than you have in consumer and other debt, and we were almost at a crisis point.

You are not heading in a particularly good direction with where you stand financially. In fact, it is a piss poor situation.

Cut absolutely all unnecessary expenses (all eating out, including lunches, maybe even cable, alcohol, and junk for the home.) Then get your debt paid down.


4 years ago my wife and I had:

three properties, total value 800k
two mortgages 235k + 25k
property taxes aging, total 20k
mastercard balance 12k
sears balance 10k
hbc balance 2k
bmo loc 15k

and she had a credit rating about 750

Now we have one heloc 245k and one mortgage 20k, three properties valued about 900k
Mastercard limit 15k, balance 0
Sears limit 12k, balance 0
Hbc limit 5k, balance 0
bmoloc limit 15k, balance 0
no other debts whatsoever, all credit cards paid in full each month, boy we suck as customers now!
and she has a credit rating of 830

What did we do? Just took a sensible and effective approach, reduced unnecessary expenditures, prioritized the payment of high interest debt first, and worked our way through it.
"The truth is incontrovertible, malice may attack it, ignorance may deride it, but in the end; there it is."
Just a guy who dabbles in lots of stuff learning along the way. I do have opinions, and readily share them!
Banned
User avatar
Dec 1, 2011
2427 posts
342 upvotes
Winnipeg
nyder74 wrote: Yeah with that much debt, you'd need some decent liquid assets to qualify for 10k unsecured line of credit.

Nyd

+1!
actng wrote: total *****. you're making $46k and you got a $26k car loan? come on.

the first step is to admit you have a problem managing your finances / credit.

you don't need more credit. you need to live within your means.
Although sounds a bit harsh, I totally agree.
With a low credit score, near maxed credit cards and a hefty car loan, I see you having a real problem getting ANY additional credit. Unsecured anyway.
Can you believe it? They sent my income tax return forms back to me! In response to question # 4, "Do you have any dependants?" I replied - "2.1 million illegal immigrants, 1.1 million crack heads, 4.4 million unemployable people, 901 thousand people in over 85 prisons, and 650 idiots in Parliament.
Apparently, this was NOT an acceptable answer.

Who the hell did I miss? :razz:
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Nov 2, 2003
17117 posts
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GTA
wayne74 wrote: Although sounds a bit harsh, I totally agree.
With a low credit score, near maxed credit cards and a hefty car loan, I see you having a real problem getting ANY additional credit. Unsecured anyway.
the truth hurts! i wouldn't have be so brutally honest if the OP didn't try to pass off the debt accumulation as some noble act on behalf of the family.

borrowing beyond your means to provide a lifestyle for your family is no hero. if your family knows you're doing this and condone this, you need to reevaluate what "family" means. if your family doesn't know about this and one day your house gets ransacked by collection agents taking their stuff away, you will lose more face and they will think you're a major loser. at this rate, you will end up homeless.

better come to terms with how rich/poor you are and live within your means.
Jr. Member
Feb 26, 2003
172 posts
2 upvotes
I just realized....... my student loan is not 20K..... only 9K.....
will the situation change?
Member
Nov 30, 2010
226 posts
171 upvotes
Toronto
That helps a little bit but the strategy is still the same, pay off your highest credit card.

The fact about your cc are close to max, car loan and credit score are still going to raise flags when trying to apply for more credit
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May 9, 2009
7133 posts
3736 upvotes
Montreal
Hata wrote: I just realized....... my student loan is not 20K..... only 9K.....
will the situation change?
Not really. The nearly maxed out credit cards and the ridiculous car loan are the major causes for concern.
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Dec 1, 2011
2427 posts
342 upvotes
Winnipeg
dardragon wrote: That helps a little bit but the strategy is still the same, pay off your highest credit card.

The fact about your cc are close to max, car loan and credit score are still going to raise flags when trying to apply for more credit
psyko514 wrote: Not really. The nearly maxed out credit cards and the ridiculous car loan are the major causes for concern.
Exactly! AND assuming there are no lates within the past 6 months, or any other negatives, the high credit card utilization would also be a huge factor in the low credit score. Pay down those debts, your score will raise above 700 easy, then you MIGHT have a better chance at a lower interest LOC or 0% promo. You're wasting your time otherwise.
Can you believe it? They sent my income tax return forms back to me! In response to question # 4, "Do you have any dependants?" I replied - "2.1 million illegal immigrants, 1.1 million crack heads, 4.4 million unemployable people, 901 thousand people in over 85 prisons, and 650 idiots in Parliament.
Apparently, this was NOT an acceptable answer.

Who the hell did I miss? :razz:

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