Pay off credit cards or truck first?

[Aleta]

I'm just trying to imagine that you have to sit down and keep track of 20 bills every month. That's time, stamps, keeping up with and not to mention stress. You would have to be careful of how much money that you would put on the lowered or o % cards, because they have an expiraton date. For simplicity alone, I would of course pay off that 700. card with the 29% interest. That's a start. As for the car, you'll have to think that one out because even though youre paying off your credit card; you will be buying another car in the future. Even if you pay the vehicle off, you might want to start up a new account in the future for replacing your car. If you have $1,000 a month to pay towards debt, I would definitely get rid of the 700 like I said and start paying on the ones for under $400. For you, it may just be a piece of mind now to get rid of some of the payments. Meanwhile, you will be paying down your other debt and maybe you could get the ones at 20% on a lower or 0 interest card until you can get some breathing room to see where you will be at that time as things are paid off.
What I would want to know is how much your minimum payments are because that makes a big difference in your decisions as well.

[jIM_Ohio]

So if keeping "piles of money" straight" is the issue, then do what you have to to keep them straight.

We have one savings account we use for the 2 car payments (and for legacy reasons our cell phone is also paid from same account).

We added up these 3 payments ($1000/mo). My wife gets paid every two weeks. We put $500 each check into this account. It earns interest before payment is made... and when cars are paid off, this account will still get $500 each paycheck. In the 2 months per year, she gets paid 3X, it also accumulates $$. This grows and grows, and becomes the car pile.

We have a different account for the mortgage, but same general principle... only enough money to pay 2 mortgages and 2 IRAs is put into this account. We actually overbudget IRA's as an emergency fund buffer (meaning we could skip IRA contribution and pocket $900 for an emergency any month). If no emergency after overbudget, then pay down mortgage...

So my comment on car vs CC vs "saving for next car"...

is to solve the immediate problem before the future one. Don't create a savings pile until you have no other debt piles. Pay down all debt (which is costing you 1-23%) before setting aside money for a car which might return you 3-5% in a GOOD year.

You have a 0% teaser rate now (might tease you for 6 months). Max this out with consolidation. In 6 months find another deal and do the same thing. Keep the rate low to suit your purposes... then close the accounts as you see fit once you have zero debt.

[Diggler]

My truck is a 2002, and my commute car is a 2001. I am planning on keeping these cars a lot longer.

The multiple payments aren't a big deal, I haven't paid for a stamp for a few years. My credit union has free online bill pay, and most of them are electronic payments... I get paid salary weekly, and keep track of everything in Quicken so I can put in my salary for the next month and see what the cash flow will be weeks in advance... if I need a trip to the grocery store, I can adjust the checking account balance as needed, and keep most of the money in the money market account until the bills are to be paid.

I have decent credit myself, the big cards are all in my wife's name, and I haven't seen many post-intro rates above 15% so I could consolidate a heck of a lot into teaser cards without worry.

[click4credit]

$50k is a big debt - if you own your own house perhaps you could use the equity in your home to borrow $50k at a much lower rate than your credit cards and consolidate all your debt into one place. It also makes things easier to manage and reduced the risk of making a late payment on one of the cards.

If you don't consolidate then you should always pay the highest interest loans first and then move onto the next highest so probably best to let the truck loan run it's course.

[th_tan]

yes, definately use house equity if you can. The rate will be much lower and consolidate your debts. I wouldn't worry about paying off the truck unless its going to save you money if you pay it off with the home equity loan.

[anonymous_saver]

Since it sounds like you would rather go for the financial benefits and not the psychological benefits, I would definitely just put your extra money each month towards your highest interest debt first over the car loan.

I would NOT however, take out a loan on your 401(k) like another poster suggested, it sounds like you make enough money to pay this off in a few years, which is no reason at all to take money out of your 401(k).

Do you have other debt like a school loan or anything? Just want to make sure, so you would consider that in your plan as well.

[anonymous_saver]

By the way, since you have over 20 cards, how many are actually open? I wouldn't normally suggest closing down cards, but I would suggest that you close some of the cards so that you and you wife only have about 6-8 open cards. This would be more managable and having too many cards, doesn't look great to lenders when you are trying to get a new loan.

I congratulate you on trying to get a handle on your finances!

[Ima saver]

I would not get a home equity loan if it was me.