Good afternoon George: I have been listening to you on the Phil Johnson show. I have also purchased 4 of your signed books.   One for each of my children and one for my Husband and I. Sadly, I have to admit that we have not been good money managers. With your books help I have been able to put away $10,000 this last year while paying off many more bills.  I have a question: I have a credit card with $11,000.00( the last thing to pay off) on it. I also have a line of credit for $29,000.00 with zero owing.  

Do you think it would be a good idea to pay the credit card off with the line of credit….. the interest on the LOC is way lower.   S.

Hey, S:

You saved WHAT? THAT is incredible! That HAS to mean you and hubby got on the same page on some of this…because that’s the only way it happens!

I only ever answer questions of what I would do because I never have all the information. I would do that immediately, but, and it’s a BIG but:

Have you learned your lesson and don’t want to get burned again? Over 80% of people who do a consolidation or move a credit card debt to line of credit have it back up to the same or higher balance within 24 months. That’s the “but.”

If so, and the odds are high, you’d have the $11,000 on the LOC AND another $11,000 or so on the credit card again, and have made things so much worse.

If you can save $10,000 in a year, you can pay this off by September….so transfer it and then take the $11,000 with tiny new interest divided by 9 months (or you pick the months) and  pay THAT every month. Don’t get complacent and drop down to the new minimum payment of maybe 200 bucks.

If you did not have a LOC and the credit card rate were 60% how ticked off would you be – and how motivated would you be – to pay that off NOW…no vacations, no eating out – every dollar going to get this insane rate paid off.

Take THAT attitude and pick a month you want it gone! And next date night with hubby spend five minutes discussing how the credit card got to $11,000, who thought it was a good idea to get it that high, and what’s going to stop you from ever letting that happen again. It didn’t sneak up on you and it didn’t happen overnight. You need to find a way to hit the stop and panic button at $2,000 and not $11,000 of credit card debt.

You’re doing GREAT – keep going!!! And, if they’re over 15 or so, tell your kids about your credit card issue. It’s a BIG lesson for them, makes you sound human and not “parent” sounding, etc., because it WILL happen to them…at some age…to some degree…and it’ll guarantee they’ll be comfortable in talking to you about it, instead of hiding it, and feeling all that stress…