Getting on the band wagon

**cwaters425** · 05-19-2010, 02:17 PM

I am new here, but have been reading a ton of post's in this forum and got all kinds of info. My wife and I are expecting our first child in December and it made us take a long hard look at are spending habits and debt. We are both on board to attack our debt, start saving money so that we can provide the best life we can for our child. We know it is going to be a long hard process, but we are iin this for the longrun. I will list our debts and have a few questions on what we should do.

Debt owed:

Old Navy (24.99%) - $75.00
Lowes (0%) - $475.00
Bank of America (17.99%) - $1750.00
US Bank Visa (0%) - $7200.00
Chase Visa (13.24%) - $12,200.00
US Bank Credit Line (11%) - $12,800.00

As of this friday, old navy will be paid off. I will also ahve an extra $1600-$1700 to put on my bills within the next week. Should I put all of that towards Bank of america since it has a 17.99 interest rate, or should I pay off Lowes and put the remaining $$$ toward bank of america? I am thinking put it all on B of A and get that gone since Lowes has 0% interest. Thanks in advance for your help. I wouldn't know what to do or where to begin if it wasn't for this site and all the helping members posting there stories.

Thanks.
Chris.

**Russ** · 05-19-2010, 02:21 PM

Hello and welcome.
Work on the Bank of America first.

How long is the 0% interest good for on the US bank CC?

**Greebo** · 05-19-2010, 02:24 PM

Originally Posted by cwaters425

I am new here, but have been reading a ton of post's in this forum and got all kinds of info. My wife and I are expecting our first child in December and it made us take a long hard look at are spending habits and debt. We are both on board to attack our debt, start saving money so that we can provide the best life we can for our child. We know it is going to be a long hard process, but we are iin this for the longrun. I will list our debts and have a few questions on what we should do.

Debt owed:

Old Navy (24.99%) - $75.00
Lowes (0%) - $475.00
Bank of America (17.99%) - $1750.00
US Bank Visa (0%) - $7200.00
Chase Visa (13.24%) - $12,200.00
US Bank Credit Line (11%) - $12,800.00

As of this friday, old navy will be paid off. I will also ahve an extra $1600-$1700 to put on my bills within the next week. Should I put all of that towards Bank of america since it has a 17.99 interest rate, or should I pay off Lowes and put the remaining $$$ toward bank of america? I am thinking put it all on B of A and get that gone since Lowes has 0% interest. Thanks in advance for your help. I wouldn't know what to do or where to begin if it wasn't for this site and all the helping members posting there stories.

Thanks.
Chris.

Mathematically, what you suggest makes a lot of sense.

However, *if* we were doing math here, we never would have gotten into debt in the first place.

So I would suggest a different approach - pay your debts off in the order of smallest to largest.

Take that $1,700 and:
Old Navy (24.99%) - ~~$75.00~~ $0.00
Lowes (0%) - ~~$475.00~~ $0..00
Bank of America (17.99%) - ~~$1750.00~~ $600

Then close the first two accounts.

What that will do is IMMEDIATELY wipe out two debts and knock the third down substantially. That will free up some money each month, sure, but MORE importantly, it will give you an IMMEDIATE sense of accomplishment, to satisfy your residual "Instant gratification" mindset.

Next month, take all the extra money you've got and continue the process, attacking BoA first, then US bank Visa, and so forth.

It will make very very little difference, financially - interest rates are only really important long term - what really matters is that you hit these debts as HARD and as FAST as you can.

Welcome to FV!

**Greebo** · 05-19-2010, 02:24 PM

Of course Russ goes anti BoA first

**Russ** · 05-19-2010, 02:27 PM

Why wouldn't she? Lowes is 0% so it costs her more in the long run and she already said the Old Navy was done on Friday.
And next month she'll wipe out Bof A anyway.

**Greebo** · 05-19-2010, 02:40 PM

Originally Posted by Russ

Why wouldn't she? Lowes is 0% so it costs her more in the long run and she already said the Old Navy was done on Friday.
And next month she'll wipe out Bof A anyway.

It won't hurt if she does BoA first - but the rest should be done smallest to largest from a motivational angle.

**cwaters425** · 05-19-2010, 02:48 PM

Originally Posted by Russ

Hello and welcome.
Work on the Bank of America first.

How long is the 0% interest good for on the US bank CC?

US Bank has 0% until March of 2011. My wife and I have got back about 5k from our taxes every year for the last 5 years. Of course we would normally jsut got out and buy stuff with that money instead of paying things off or saving, but that has officially changed. We are commited to getting rid of our debt and start saving for our baby, so one day they won't get into the same situation we are in now.

Anyway, we will be using our tax refund ( should get back a little more than norm al because of the baby credit), but expect to put $5,000 on the the usbank visa at the begining of the year. Our goal is to have everything but the Credit Line and Chase card paid off by March of next year.

thanks,
Chris.