There's also a 2nd mortgage option. Fixed at like 7.5 IIRC. These are both from our credit union, no fees to set up the loans.
You guys are killing me with these overall statements.... Ain't no way in hell a heloc variable rate will go over the card rates he's paying. I don't know if you guys are just stuck in a rut or if you're not getting just how high credit card rates are but statements like the one above make absolutely no sense in this specific discussion.
I can see it...with $20 burgers and $15 drinks these days. I can also see the racer perspective...I spent around $20K my first year racing AHRMA in 2002 (mostly on CC's)
It's insane I know. I'd have to go back through her CC statements to get a better perspective. I did do a quick audit of our spending with our bank account last month. In October we spent $603 on FAST FOOD alone. In all honestly I'm guilty of about $80 of that and $75 was for dinner for my daughter's birthday. Needless to say the eating out has stopped.
I can definitely see how spouses get blind sided by racing debt, no doubt. Easy to piss away a lot of money and nothing to be seen for it (tires, race fuel, entries, etc). All of which are probably unknown to the wife/GF. Throw in a crash or two worth of repairs, and yeah, I can see that.
Yeah, first 6 months the HELOC is 2%. Then goes to 6. Max we'd pay is 12%. Monthly payment is 1% of the balance of the loan so $400/month and would go down as we pay it down.
I actually told my wife exactly this couple days ago. People get 40K loans all the time probably at 6-7% for cars. Only difference is we have nothing to show for it. (Ok, that's a big difference I know)
Agreed but it's hilarious people want to act like this is the end of the world or end of their marriage. Just trying to put it in perspective
FWIW, I can set text alerts to be sent every time my cards are used. It won't get you out of the current mess, but could head off i didn't know disasters in the future.
Doesn’t matter if a HELOC rate is still lower than credit card rates, a HELOC is an open line of credit that, without the discipline they’ve shown they lack, could easily maintain in perpetuity. Having a rate adjust upward at the pace they’ve been going will definitely affect their abilities to stick to their plan, much less should they once more relapse into irresponsible spending and debt management. Personally I wouldn’t look at anything other than a fixed rate installment loan as a means to get out of the mess, to reduce any temptation to color outside the lines they’re drawing.
45k is manageable, but the concern remains, that if there are no significant mindset and lifestyle changes, than you will end up right back in this same spot later, just with added resentment, and hatred towards each other. If divorce is mentioned now, it certainly will be on the table then. That's why I think leveraging the house is a bad idea unless those conditions are met. If you can agree on that, and show some progress to understanding exactly how and why you got here, then absolutely using the heloc to consolidate is the cheapest way forward. But if using the heloc to simply take the balance off the cards just leads back to using the cards the same way, with the same spending habits, you'll end up with a balance on both in short order, and doubly fucked. Lean on each other for help now, and become stronger in the end. You can do it.
FWIW, I told her last night I'd sell my vehicle and drive our beater Honda Accord. Would get $8-12K for my vehicle. She keeps driving her (fairly nice SUV, all are paid for). I also have other assets of around 5K I would sell. So potential I could come up with 15K right there, I'm definitely willing to do my part.
Stay focused on this being a joint project. If she isn't willing, you have more serious problems to handle.
You guys could amortize a decent grill pretty fast. Plenty of videos on YouTube on how to replicate all the major chains burgers.
Not sure of the age of the OP but seems as though younger folks, aka milennials, with a lil means want an experience vs an asset. Also its always good practice to reconcile card charges with purchases before the balance due date... because its real easy to over look a suspect $30 or $50 charge.
Selling both cars, and buying a couple cheaper ones would be a quick and easy way to come up with some cash to put towards it, but it doesn't sound like there is any will to sacrifice coming from the other side. If there isn't any at all, then there is a deeper issue that needs addressing. Cars are easy to wheel and deal, especially if they are paid for with no liens and in good condition. They are also an easy area for people to get carried away with spending for perceived luxury. At the end of the day, it's a means to get you from point a-b, and is an area where I'd sacrifice the most if I had too. Then again I grew up driving absolute shitpiles into the ground, so that's not a big deal for me. I understand it might be for others.