I have 4300.00 in credit card debt between 2 cards with and apr of 18 on one and 23.3 on another I am being offered a 4700.00 line of credit with no fee from wells fargo to consolidate these 2 at a max rate of 18% I have better than $3000.00 in savings that i can begin paying down these debts on my own what is the best way to attack this and will it affect my credit score if I take the line of credit vs paying them down myself?
Since you have $3000 available to apply to your debts, I would encourage you to resolve your two credit card accounts without taking the loan from Wells Fargo. Since the interest rate on your lower rate interest card and the rate on the loan offered by Wells Fargo are the same, I see no monetary benefit to consolidating your two credit card accounts with the $4700 loan. You should use your $3000 savings to pay off the account with the higher interest rate (the 23.3% account). You can then apply the remainder of your savings to reduce the balance of the 18% card. Basically, you will be left with a $1700 debt on an 18% account, which you can pay off as your finances allow. You would end up with the exact same balance and interest rate if you took the Wells Fargo consolidation loan for $4700 and applied the entire $3000 to that account.
Make sure you pay at least your minimum payment each month on the remaining balance, but do your best to pay more, as that will save you a lot of money in interest payments. After you have paid off your debt, I encourage you to keep the accounts open and use them sparingly, so they continue to report a positive payment history to the credit bureaus. You should only charge what you can afford to pay off each month, so you do not incur finance charges. You also want to avoid accruing a new balance on the accounts after you have worked so hard to get the accounts paid off.
Credit scoring is too complicated for me to tell you specifically how a particular action will affect your credit score. I do not think that consolidating your two accounts with the loan from Wells Fargo would have much effect on your credit score. If you do decide to consolidate, don?t close your older account even after they are paid, since accounts with long positive payment history exert a positive influence on your overall credit rating. To my knowledge, the only other effect that taking this loan could have would be to slightly lower your debt to available credit ratio, but I do not think the possibility of a slight improvement in your credit score justifies taking a loan that provides little or no financial benefit.
Bills.com offers a wealth of information about both debt consolidation (http://www.bills.com/debtconsolidation/
and credit scoring (http://www.bills.com/creditscore/
I encourage you to review the material on these pages to learn more about the options available to you.
I hope this information helps you Find. Learn. Save.