(Closed) Advice on how to may back debt…what to pay first

posted 6 years ago in Money
  • poll: What is the "best" plan to pay off my debt?
    Loan, then both cards equally by splitting the monthly payments : (4 votes)
    4 %
    Both credit cards together, then the loan : (57 votes)
    52 %
    One credit card at a time, then the loan : (46 votes)
    42 %
    Loan first, credit cards seperately after : (3 votes)
    3 %
  • Post # 3
    Member
    46415 posts
    Honey Beekeeper
    • Wedding: November 1999

    Definitely the cards with the higher interest rates.

    Post # 4
    Hostess
    16213 posts
    Honey Beekeeper

    I’m no expert, but I think I’d tackle the higher interest rate first because that rate costs you more money the longer it takes to pay back the loan.

    Post # 5
    Member
    5977 posts
    Bee Keeper

    I’m with your Fiance – the credit cards have a much higher interest rate, so you’ll be saving more money in the long run by paying down the credit cards first, then the loan. 

    Post # 6
    Member
    7293 posts
    Busy Beekeeper
    • Wedding: October 2011

    Snow ball it !!

    Start with the smallest and aggressively pay it off then the next biggest.  Your debt dissapear before your eyes. Also the CC’s because of the interest and the effect on your credit!

    Post # 7
    Member
    5786 posts
    Bee Keeper
    • Wedding: May 2011

    Credit Cards, if the rate is significantly higher on one card then that one first.

    Post # 8
    Hostess
    18643 posts
    Honey Beekeeper
    • Wedding: June 2009

    I agree that CCs first because they are smaller and have higher interest rates.  Just roll the payments from them to the next debt once it’s paid off.

    Post # 9
    Member
    8882 posts
    Buzzing Beekeeper

    Whatever has the highest interest rate, which I’m betting is the credit cards (speaking from experience). The interest really adds up and you’ll save youself money in the long run.

    Post # 10
    Member
    9056 posts
    Buzzing Beekeeper
    • Wedding: June 2010

    I agree with all the previous posters. Take your highest interest loan and pay as much as possible. Pay the minimum payment on the rest. When you finish with the highest interest card take the money you were used to paying on the first card and add it to the next highest interest. Repeat until you’re down to nothing. 

    Other side note advice might be to see if you can transfer the cc debt to a lower interest card or otherwise consolidate it. Or call your cc to see if you cannegotiate a better interest rate. 

    Post # 12
    Hostess
    18643 posts
    Honey Beekeeper
    • Wedding: June 2009

    I wouldn’t close the Visa when it’s paid off if it doesn’t charge an annual fee.  Since you are carrying debt on the other one, that will throw your debt to credit limit ratio way out of wack and will mess you up if you want to apply for a mortgage or something later.  If it doesn’t charge a fee, just cut it up and don’t use it anymore but leave it open.

    Post # 13
    Member
    491 posts
    Helper bee
    • Wedding: April 2012

    Again I agree with PP’s about highest interest first, but in response to your last comment about cancelling your Visa as soon as it’s paid off, from a credit standpoint, don’t! Number of open/closed accounts factors into your credit score and it also looks good if you have the option of using the credit but are able to not rack up debt. I’m not explaining this very well…

    Post # 14
    Member
    1725 posts
    Bumble bee
    • Wedding: October 2012

    @Eva Peron:  What she said! This is Dave Ramsey’s approach…if you haven’t heard of him, you should check it out!

    Post # 15
    Member
    9056 posts
    Buzzing Beekeeper
    • Wedding: June 2010

    @MrsSaltWaterTaffy:  

    @LoveMySailor1018:  OP may want to double check that on her own. Canadian credit scores are  calculated slightlydifferently in that your “available credit” such as in open credi card with a say $10,000 max can actually harm your future applications more than closing a card, since youre seen as more of a risk since technIcally you could get a huge mortgage you’re barely able to afford, and then go max out that cc on top. 

    Post # 16
    Member
    2077 posts
    Buzzing bee
    • Wedding: August 2012

    @Eva Peron:  I’m with you on that!  I “snowballed” my debts and only have one left to pay off!  Wahoo!  My Fiance is currently using this method as well and it’s working very well for him.  Once we combine our finances, I’m assuming we’ll continue paying off the debt we have this way.

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