I would suggest going with the higher interest rate than, although it will cost you more money in interest.
My reasoning is this: If you bring your credit card too close to the credit limit, it will damage your Empirica (Credit) score and you may potentially pay much higher interest rates on much larger sums of money (read mortgage or vehicle loan)
However, if you choose to do this, I would suggest you make the minimum payment on the credit card and pay any additional money you can towards the loan with the higher balance.
Good luck - Let us know what you decide
