However, I'm reconsidering my stance on this for Chase Card #2. It is carrying an 11.99% interest rate which is variable and will go up whenever the Fed decides it's time to raise rates. I've made some progress on this card balance since I started the blog, much in part to that $500 gift card I received for refinancing the HELOC. But it pains my heart to know that I'm paying almost 12% interest when I could be paying my bank 2.75% which is the rate on any new credit advances I have available through the HELOC right now. When I refinanced $73,000 of the HELOC to a fixed rate, that left $27,000 of available credit that is charged prime minus 0.50% if I choose to tap that credit.
- HELOC is secured by the rental property, not my residence.
- HELOC interest rate is prime minus 0.50% (variable)
- Chase #2 interest is prime plus 8.74% (variable)
- Chase #1 interest is 6.99% fixed.
- Capital One interest rate is 4.99% fixed.
- Bank Credit Card interest rate is prime plus 2.90% (variable)
Mathematically, I know it's the right move. I'm just not sure I'll be as inclined to find those extra payments if the pain (high interest) is gone! Of course, that could free me up to focus on Chase #1 - the card with the highest balance and the next highest rate.
I'm SERIOUSLY considering taking an advance on the HELOC and paying off Chase #2. The due date of my next payment is the 23rd, so I'd love to hear any input you have.
And on a personal note, I own a few shares of JPMorganChase. But I own more shares and have more invested in the stock of the bank that holds the HELOC. From a shareholder perspective, I'd rather have my money go to the bottom line of the HELOC bank. Silly, I know but I can't help bringing in that analysis to my decision.