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03-04-2019, 03:16 PM #1
Advice on which credit card to pay down
Hi all, this is my first post!
OK, I have been doing this wrong all along!! I want to turn this around and have a mission to do so with the limited amount of funds that I have. I need advice and to stick to it on which credit card to pay down..I keep going from one to another and feel like I keep doing this all wrong.
I do have a mortgage and monthly maintenance (about $1650/month, plus every April there is an assessment/abatement that is an additional $850 that month), along with car payments ($360/month- which will last 5 more years), and then other monthly bills. I have cut down so much, I am hardly doing anything (going out wise) as I do need to focus on my debts, which totals about $39000 (not including the car just credit cards)
I have done balance transfers but can't do them now, nor can my credit card issuers reduce my interest rate. I only have about $350/month towards paying down debt which I know is really minimal. I am trying to find ways to cut back and put some extra money towards my credit cards, but I also need to save a bit too.
Here is the credit card information
Card 1 Balance: $20,524: $16524 interest rate 15.24% still have a balance transfer of $4000 until August.
Card 2 Balance: $7536 interest rate 20%
Card 3 Balance: $4474 interest rate 15.24%
Card 4 Balance: $5600 interest rate 17.49%
Card 5 Balance: $1200 had done a balance transfer, which ends in September, I believe the interest rate will be 15.24%
Yes, I am a horrible mess. I am not really open to doing a debt consolidation loan and since I can't do balance transfer, I can't put them all in one or two cards...I was thinking I should keep focusing on card #1 and then the next one. What are your thoughts? I was actually up to $42000 so I have made a tad headway, but let me know your insights...Thank you!
Last edited by AM121; 03-04-2019 at 03:42 PM.
03-04-2019, 03:50 PM #2
- Rep Power
I started with the lowest balance. That way I COULD pay it off sooner. It kept me focused and motivated.
More important than picking the exact right card to pay off, is to just pay one off. Then you have that payment amount to add to the payment on the next balance you decide to pay off.
Just pick one and pay it off. If it were me, I'd pay the 1200$ one off because it would feel so good to cut it up and throw it out or close the account entirely. A real bit of progress on the trip up debt mountain.
03-05-2019, 02:43 AM #3
I? agree with Maggie.... Pay off the lowest amount first. Take the $350/mth and pay off the $1200 balance. That will take 4 months. Then pay off the smallest from the group remaining...And so forth.
I like quick wins as well, to keep me motivated.
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03-05-2019, 08:07 AM #4
I disagree. If you are serious and committed, paying down the highest interest rate card first will clear your debt sooner.
The only reason for paying down the smallest balance card is motivation and reaching a goal sooner. By doing it that way, you will pay more interest and it will take longer to pay off your debt.Kim
The Lord will provide
03-07-2019, 07:30 AM #5
I'm with CPA-Kim. Pay off the highest interest rate loan first, then move to the next highest interest rate loan. Saving the most amount overall was all the motivation I needed. You may be different.
03-07-2019, 07:43 AM #6
- Rep Power
I would pick either the highest interest rate or the lowest balance. Card #1 fits neither category. Do you mean you have $350 extra besides paying the minimum on all debts? or $350 total to put toward cards?
Can you take on some extra work to bring in more money?Make America Kind Again.
03-08-2019, 10:01 AM #7
- Rep Power
Refer to Dave Ramsey. Google him.
His advise is to pay off the smallest loan first...while making minimums on the rest. Then snowball THAT amount to the next smallest debt. Sure...you might be paying off the lowest interest rate first...but by snowballing THAT amount onto the next debt is a sure-fire way to pay them all off.
BUT the most important thing is...don't open another credit card..and don't re-run up your debt.
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