Planning on moving and getting our house ready to sell has been more expensive than I expected. I'd like to get this debt off of credit cards. What's the most cost effective way to do this?
You should look into a home equity line of credit:
A home equity line of credit (often called HELOC and pronounced HEE-lock) is a loan in which the lender agrees to lend a maximum amount within an agreed period (called a term), where the collateral is the borrower's equity in his/her house. Because a home often is a consumer's most valuable asset, many homeowners use home equity credit lines only for major items, such as education, home improvements, or medical bills, and choose not to use them for day-to-day expenses.
I'm assuming that when you sell the house you expect to be able to pay off these loans. In that case you need a loan that can be paid off in full without penalty, but has as low an interest rate as possible. My suggestions:
- Look for a credit card with a low introductory rate, and transfer the balance(s) to that. When you sell the house off, pay off the card and tear it up
- Get an line of credit. Can be secured (HELOC) or unsecured, as long as you can pay it off when the house sells.
- For anything you haven't spent already, take advantage of any "no interest for six months" deals you can find at the places you are buying.
sheegaon's reply looks fine to me, a HELOC can usually be set up for a minimal ($50?) fee, and is currently a pretty low rate, mine is 2.5%.
If this doesn't appeal to you, my other suggestion is a 401(k) loan. While this is usually a last resort and 'not' recommended, a short term use may make sense. The rate is low, and you can pay in back in full after moving into the new house.
In planning to buy a house, and sort out how to handle the costs of some initial renovations, I've been considering using Lowes and Home Depot credit cards (hopefully this will count differently than the typical credit cards I think you're referring to):
You should definitely read the fine print first, as the interest rates can shoot up after the first 6 months if you don't pay the balance in full on some of them.
Also, Lowes has a project card that gives you the 6 month no interest (only a minimum payment), and you don't have to pay off the full balance at the end. This one even has more reasonable rates, so this could be a good way to go.
You could take on more work. Pizza delivery, lawn work, babysitting, housecleaning, etc. None of those are much fun, but all are better than opening a credit card bill.