Need some CC advice please!

[gg916]

Here's what I have...

$169.09 @ 22.80%
$336.51 @ 23.99%
$381.21 @ 22.80%
$425.72 @ 0%
$1467.55 @ 17.24%
$1876.47 @ 13.24%

I have been paying on these cards for years and I can only afford to pay the minimun...sometimes a little more. Right now I have $1750 that I would like to apply to my cc's. I know its good to pay off high interest first, but my highest interest cards are my lowest balances. Should I split up the $1750 to pay some on each one or pay off all the small balances or apply toward the large balances. I dont have extra funds like this very often, so I want to make sure I do this the best way that I can to help get rid of the debt quicker. Any advice would be greatly appreciated!! Thanks!

[wincrasher]

I'd get rid of the top 4 you've listed - that is 1312.53. Then the remaining 437.47 against the higher rateof the remaiing two. That is going to give you alot of simplification and sense of accomplishment. With all these little balances floating around, you are loosing sight of how much you really owe.

The zero interest account is only going to remain that way until you screw up one month - very likely to happen with all these accounts. Just get rid of it.

This will also free up the minimums on these small accounts so you can apply them towards your remaining two big accounts in the months going forward. If you were paying 2% a month, this should mean around $44 a month.

[disneysteve]

Welcome. The best way is always to pay the highest interest first because that is the debt that is costing you the most money to carry.

This $1,750 is going to improve your situation dramatically. You can entirely pay off the first 3 on your list. That's $886.81.

That leaves $863.19. When does the 0% deal run out on the $425.72? If it is soon, I think I'd pay that off to prevent that rate from skyrocketing. Otherwise, I'd put the rest toward the $1,467.55 @ 17.24%. That is only if you know you will be able to repay the 0% card before the rate jumps.

The most important thing (ok, the 2nd most important thing) is that once you've done this, you take the money you were paying on these cards and add it to what you are paying on the remaining debt. That is called snowballing.

The 1st most important thing is that you stop using credit cards entirely, if you haven't already. If you don't have the money to buy something in cash, you can't afford it. Plain and simple. Follow that rule and you'll never be in this situation again.

[minnie1928]

I agree, get rid of as many as you can. I think your debt will feel more manageable when you are only dealing with 1 or 2 accounts instead of 6. Once those 4 are gone, then throw all extra money on the account with the highest rate.

[wincrasher]

Also,

Keep these accounts open with a 0 balance. Closing them will hurt your credit score.

[Mydebtregret]

Like mentioned before, pay off your highest APRs first. You can get rid of a few of them with just that $1,750. If that %1,750 is the only money you have for reserve then i might think twice. Maybe you should only use a portion of that money to pay off debt.
You must think about emergencies that might come up. Best of luck!

[LuxLiving]

I'd follow Disneysteve's advice but also would see if I could transfer any of the remaining higher interest balances down to the 0% card and set up autopayments on it so I didn't screw up and lose that rate! Even if you can't transfer to the 0%, I'd roll as much as I could to the 13.?% card having once rid myself of the others.

One thing I might add into consideration is which minimum payments IF paid off, would free up more money in the monthly budget that could then be snowballed on the other debt?

[melinuxfool]

There are two methods recommended by various financial people. One is to pay off the cards with the lowest balance first, regardless of interest rate, to accomplish quick victories and have more breathing room with fewer required payments.

The more mathematically correct approach is to pay off the highest interest rate first, because you'll get out of debt quicker and pay less in interest.

For you, well, the two sort of blend. Your highest interest rate cards happen to be the lowest balance, so it's really a no brainer here.

Take that money and completely pay off those first three. I'd try to get the remaining debts transferred to the 0% card if possible. And then make extra payments on that one to get it payed down as quickly as possible.

Then, never use the credit cards unless the money is already in the bank to pay it off in full. In other words, have the cash to buy it outright before you swipe.

Like mentioned before, pay off your highest APRs first. You can get rid of a few of them with just that $1,750. If that %1,750 is the only money you have for reserve then i might think twice. Maybe you should only use a portion of that money to pay off debt.
You must think about emergencies that might come up. Best of luck!

A very good point that bears repeating. Until the cards are paid off, you should keep at least 1,000 in the bank for emergencies. Otherwise, you'll just have to go right back into debt again if something happens. So if that $1,750 is all you have, then I'd only put $750 toward the debt, and knock out as much as you can.