Question

**mom2two66** · 07-24-2010, 06:57 PM

This has has gotten way out of hand. Our credit card that is. Quite a while back, I cut up all our credit cards but one. Well that one has to much charged on it. I am going to focus on getting some debt paid off. We only owe about $2,000 on one auto, owe Bestbuy for a TV, our mortgage and our credit card. My question, is if you have enough to at least pay off the credit card yet still have money in savings should we do it? I have been paying extra on our car anyway. Bestbuy is 3 years no interest so I am not worried about that one. I have always bought furniture, TV's etc. this way and pay them off well before time is up. We have always paid our credit card off but this year has proved to be a tough year yet we still lived like it wasn't. My main focus now is becoming debt free. Especially working on our mortgage!

**Russ** · 07-24-2010, 07:04 PM

Welcome to Frugal Village!

Would you like to list what you actually owe and the associated interest rate for each CC? It would make it easier to answer your question.

In case you don't want to, that's fine, I can give a generic answer.
To snowball your debt...
Typically you would take the lowest balance CC and pay as much extra as possible each month while paying the MINIMUM towards all the others.
As the lowest is paid off, apply ALL that you were paying on the lowest towards the next one.

**Russ** · 07-24-2010, 07:06 PM

If you have an emergency fund in place (whats comfortable for you) and you can pay one off and STILL have that fund, by all means do it.

CONGRATS on taking the bull by the horns to get your debt paid off.

**mom2two66** · 07-24-2010, 07:24 PM

We owe $16,000 on our one and only credit card and the interest rate is 13.99%. Our car is $2,000 and and interest rate of 6.94%. I understand the whole snowball thing and I have basically been paying as much as I can towards our car to pay it off. We wouldn't even have a car payment if it wasn't for the person who hit us from behind and totaled our other perfectly good vehicle. Grrrr! The hubs wants a new pickup but is willing to live with his cause it is paid for! Anyway, we would have plenty left in savings to feel comfortable with.

Stephanie

**lparker** · 07-24-2010, 07:31 PM

If you are REALLY confidant that you won't lose your source of income AND have enough in savings to pay off the card and still have $1000 left, pay off the card. If you have over $1000 in savings, take the difference between what you have and $1000 to pay down the card - also have the card issuer reduce the credit line.

If the cc's interest is higher than the car interest, put your extra on the cc. Absolutely no sense paying more than you have to in interest.

If you haven't read much in the forum...$1000 is considered a Baby Emergency Fund (BEF). This money is used for the pesky things like a new tire, hot water heater, etc. that you would normally buy with a credit card if you really need it (not want it). The main objective most of us are shooting for is to get debt free and stay that way.

Glad to have you join us here.

**lparker** · 07-24-2010, 07:52 PM

You replied to Russ while I was working on mine.... If you are comfortable paying both, go ahead. You will probably save a lot more in interest than what you will earn from savings.

**mom2two66** · 07-24-2010, 07:55 PM

BTW, thanks for the welcome. My plan is to build back up our MMKT account that has dwindled too. Our MMKT is basically our emergency fund for stuff like car tires etc. We would have to sell some stock to pay the credit card but we are willing to do that. We are lucky in the fact that we don't have to worry about hubby's job. He has worked for this company (small family owned) for 23 years and they treat him like family and always have. I can't begin to tell you what a blessing that is. I work in a public school and I have gotten my hours cut down to 6.5 per day instead of 7.5. I am thankful to have a job! Before that I was a SAHM.

I never thought of asking them to lower our cc credit line!! We do not need a credit card limit like that!

I used to come here often and in fact had to make a new login as it has been to long and I can't remember the old one. LOL It always gave me the extra push to keep our debt down. I really want to get our house paid for!!!!

Take Care!

Stephanie