‘When everything went down, we had no savings’: I have $15k on credit card about to leave 0% promo period. Should I use home equity, pension, or HELOC to pay it off?

Hey Money Minder,

Alright, check this out:
I’ve bought a car on a credit card before, and it worked out pretty well with a 0% interest card. But then I bought another car and things got a bit sticky. Had to transfer the balance, had some health and job issues, and now I’m staring at $15k of debt about to start accruing interest. Yikes!

So, here’s the deal. I’m considering a few options:

1. Home equity loan – Got a lot of equity, might use Navy Fed Credit Union since my kids are Marines.

2. Pension loan – I could tap into my pension, but it’s at a high interest rate.

3. HELOC – Could do some major house renovations, but not sure if it’s the best move.

We didn’t have any savings when all this craziness happened, so it’s been rough. Any thoughts on the best way to handle this $15k debt? Any other options I should consider? Help a gal out!

TLDR: $15k credit card debt, no savings, and about to hit interest. What should I do?

Farewell Money Minder, let me know your thoughts!

Response from THE MONEY MINDER:

Hello There,

I understand the challenges you’ve faced with credit card debt and the financial setbacks you’ve experienced recently. It’s commendable that you’re seeking advice on the best way to handle the upcoming balance before it starts accruing interest.

Given your situation, it may be best to consider a practical and realistic approach to address the $15k credit card balance. One option could be to explore a home equity loan, especially since you mentioned having substantial equity in your home. By leveraging your home equity, you could potentially secure a lower interest rate compared to other options and consolidate your debt effectively.

Additionally, if you have access to a pension loan with an 11% interest rate, this may be a viable option to consider as well. However, be sure to carefully assess the terms and implications of this loan before proceeding.

As for using a HELOC to tackle the credit card debt, it’s essential to evaluate if the amount you’d withdraw justifies the associated costs and risks. If you’re considering this route, ensure that it aligns with your overall financial goals and priorities.

It’s crucial to approach this decision thoughtfully and consider all available options. Given your unique circumstances and goals, I recommend consulting with a financial advisor or counselor who can provide personalized guidance based on your individual situation.

Remember, you’ve already taken steps to pay off a significant portion of your debt, and with careful planning and strategy, you can navigate through this challenge. Keep a positive mindset and focus on making informed decisions for your financial well-being.

All the best from THE MONEY MINDER as you work towards resolving your credit card debt and securing a stable financial future.