How Should I Repay My Credit Cards?

[starving_student]

Originally Posted by Sweepsplayer

Welcome WS! I have a few suggestions:

First, I know you were hoping not to take out any more school loans than were necessary, but school loans are a lot less expensive than credit card debt (tax-deductible too!). You may want to think about getting larger school loans if possible to pay of the CC debt. (But don't keep charging on the credit cards, of course.)

Second, you said you don't know what the interest rate on the 2nd card will jump to in June. Time to find out now. It should be on the inserts that come with the credit card. If you don't have those call the company to find out. That's critical information. It's always better financially (although not necessarily psychologically) to pay off the highest-interest credit cards first. Your situation is a little more complicated because you have a 0% promo rate expiring -- we have to know more details to give a definitive answer.

Third, you may want to balance-transfer the $3278 to another promo deal before June. This is an option as well.

I second

[Tree0164]

Get a small emergency fund if sounds like you are single so $500 would probably be fine and then send the rest to your credit card company.

I would do a balance transfer to another card.

Also if you are getting $1300 back you may need to adjust your tax withholding.

[Well Spent]

UPDATE: I paid off the remaining debt of $2,200 this month before the 0% teaser rate ends in June. I am out of credit card debt. Finally.

[Well Spent]

Tree0164,

How do I go about changing my tax withholding? I've always done the same thing: I file "exempt" meaning I have no dependents, which is "0" I think.

[Haku]

Originally Posted by Well Spent

UPDATE: I paid off the remaining debt of $2,200 this month before the 0% teaser rate ends in June. I am out of credit card debt. Finally.

Outstanding!

[flash]

Congratulations! Well done!

And here I had all this advice I was ready to give...

[sweeps]

Originally Posted by Well Spent

How do I go about changing my tax withholding? I've always done the same thing: I file "exempt" meaning I have no dependents, which is "0" I think.

You can change tax withholding on a W-4 form, available from your HR department.

Claiming exempt is not the same thing as claiming 0. You can only claim exempt if you had all of your federal tax refunded last year and expect that again this year. That is pretty uncommon. Claiming 0 means you are not claiming any exemptions from withholding. The larger the number, the less your employer will withhold, the more money you'll get in each paycheck.

[abowers]

I need to post somewhere that I finally paid of my CC that was carrying a 16% interest rate. It was $1500. I balance transferred some to a 0% card 3 months ago, the rest I've paid off over the last 3 months. I've put all my money from babysitting, surveys, selling bags, etc toward paying it off. Woohoo!

Now I work on paying of the 0% card before May 2007 (much smaller balance) -- and I've got the monthly payments figured out for that to have it all paid off before then.

This is a card that's been hanging over my head for some time, so I am very excited.

[greedy4chips]

Originally Posted by abowers

I need to post somewhere that I finally paid of my CC that was carrying a 16% interest rate. It was $1500.

Congrats on getting rid of that 16% debt! Even if you moved some to a 0% card for the time being. At least the monster is not growing.

And I bet you won't get into debt again at anywhere near 16%!

[abowers]

Yeah, the remaining balance on the 0% Card isn't bad, and I won't have a problem paying it off before the promotional rate is over.

I worked out in my tiny graduate assistant budget how to pay that puppy off in a few months.

This cc debt was an unfortunate mistake from my 3rd year of undergrad. Blah. Just happy to have paid it down so much! :-)