First post---- first question

**dkhd** · 02-19-2008, 09:59 AM

Howdy!!

I haven't had the nerve to post yet but I have a question that I would like answered. It's a scenario issue:

DH and I have 30k in CC debt ( ouch). We have it all at 4.9% for life and are paying $600 a month minimum on it. Without extra payments we will be debt free in 60 months ( not soon enough but a start)

We currently own 2 paid off cars. One is 5 years old with 75k miles. The other is 11 years old with 150k miles. Both are going strong but we are aware that the 11 year old car could be on its last years.

I was planning to start "practicing" paying a car payment --budgeting $300 a month. The question I have is where to put it??

1. Put it in a savings account at ING ( 3.348%) marked for car fund and use that money for car repairs / a new vehicle if and when I need it.

or

2.Should I take the $300 a month and add it to my debt payment and keep trying to knock it down.

We currently have $2500 in our Emergency Fund. We both have FICOs of 765 so getting a car will not be a problem when we need to.

I just can't figure out the best plan.

Thoughts and Advice?

Thanks!

**Lady_V** · 02-19-2008, 10:07 AM

Others may not agree, but I say bank it until you need to get a replacement car.

You will, as you say, practice making payments, and even if you only get an additional 6 months out of the original car, you would have money set aside for taxes, registration, insurance etc. A lot of people forget about those additional expenses, the car dealers are more than happy to add them in to the price but I don't see the point of financing the one time payments over a 5 year stretch.

**POOTERSMOMMY** · 02-19-2008, 11:19 AM

I'd put the money on CC as you are paying a higher interest rate than you would be making at ING. But that's just me. If you want to increase EF split the difference. 1/2 to CC - half to EF. Or pay extra $300 to CC everyother month.
However you do it - I would sure get that CC debt down as quickly as possible.

**Denvergirlie** · 02-19-2008, 03:19 PM

i would get rid of your debt you already have before taking on more consumer debt. But that's me, good luck with whatever you deceide

**dkhd** · 02-19-2008, 03:28 PM

Originally Posted by Denvergirlie

i would get rid of your debt you already have before taking on more consumer debt. But that's me, good luck with whatever you deceide

I'm not asking if I should take on more debt. I was asking apply the money as I "pay" a car payment.

My car may last 5 more years---it might not---trying to get a game plan together.

**krbshappy71** · 02-19-2008, 04:03 PM

Originally Posted by dkhd

I'm not asking if I should take on more debt. I was asking apply the money as I "pay" a car payment.

My car may last 5 more years---it might not---trying to get a game plan together.

I would apply it to your debt. The faster you can get that off your head, the better. I also liked the suggestion to apply it to EF as well, just switching off every other month. That will allow you to watch the EF grow and the CCard decline. How rewarding!

**FrugalMomof3** · 02-19-2008, 04:40 PM

I would apply the money to debt, you said you have $30,000 in debt that you could pay off in 60 months paying just the minimum correct? Think about how much faster you could get that done if you paid that extra $300 to it every month, you would knock off atleast 30 months and you could be debt free in 30 months or a little more than 2 years!

**Starlight9803** · 02-19-2008, 06:07 PM

If it were me personally, I would apply the extra to the CC debt in order to get it paid off faster. I drive an old car with very high miles, but all of our extra money is put into debt payoff right now. Although, my situation is different in that my DH can fix nearly anything (he does 90% of our car repairs) and if he can't fix it, BIL is a certified mechanic.

**erstbrmom** · 02-19-2008, 07:45 PM

Pay off the CC debt first.

**AmyBoz** · 02-19-2008, 07:52 PM

Love the idea of practicing the car payment. I've been trying to get my parents to "practice" retirement for awhile, but they refuse and next year...whoo-boy...will they be in for a shock.

That being said, I'd use the money for the CC debt. The sooner that is gone, the freer you will really be.

**mom2matty** · 02-19-2008, 09:20 PM

First.....Hi and Welcome! I agree with paying the CC debt first!!

**dkhd** · 02-19-2008, 10:00 PM

Thanks so much!!

I was thinking pay off debt too but DH was thinking save the money. We have a good sized EF and we have small accounts set up for vacation and christmas so they doesn't take us by surprise--- so I guess it's full speed ahead at punching the CC down.

**lgw** · 02-20-2008, 10:42 AM

Out of curiosity, is your 4.9 percent CC a Capital One Card? We were offered 4.9 percent for life about 18 months ago, which I jumped at. But Capital One recently raised our rate to 9.9 percent. When I called them on it, they dropped it to 7.9 percent. But I'm still peeved that the "4.9 percent for life" was total hooey.

**dkhd** · 02-20-2008, 12:07 PM

no the 4.99% are with Amex and USAA

I opened the Amex ones ( we both have one) to get the BT for life offer..there were no fees at all with it. I transfered all the little debts that were hanging around to these 2 cards. This was about 9 months ago. The offer is still out there.....look up American Express CLEAR.

Then I contacted USAA ( where we do all our banking and insurance) with what Amex had given us and they lowered the rate on the balance we had with them.

**ladykemma2** · 02-20-2008, 08:02 PM

Originally Posted by dkhd

Thanks so much!!

I was thinking pay off debt too but DH was thinking save the money. We have a good sized EF and we have small accounts set up for vacation and christmas so they doesn't take us by surprise--- so I guess it's full speed ahead at punching the CC down.

uh, have you considered why you are you taking vacations when you are 30,000 dollars in debt?