I got a doozy - Paying off credit?

[disneysteve]

I was wrong its set at Federal - 8, State - 4

Even worse

[disneysteve]

Car $8630 9.49%

Do you have a good credit rating?

If he had a good credit rating, he wouldn't have such an outrageous rate on his car loan.

[SavingSteve]

One big danger of taking the 401k loan is that it does not change the behavior that got you into CC debt in the first place. There is a real risk of winding up with new CC balances AND the 401k loan for 48 months.

Not only does the 401k loan screw up your retirement savings, it could be a horrible deal if you pay tax twice on that money. The loan repayments are after tax money, then the money gets taxed again when you retire and withdraw it.

Your CC balances don't look that bad. You should be able to knock them out by adjusting things a bit and being aggressive about paying, combined with the possibility of a balance transfer offer or two. But keep in mind, the balance transfer wont help change your behavior either.

Maybe a credit union could help you refinance that car loan to a lower rate.

[Fishindude77]

When you get this all cleaned up, you seriously need to start building an Emergency Fund like there are so many threads in here about. That is how you pay for things like transmissions, flooded basements, etc., not putting it on a credit card.

Another tool for disciplined money managers is to have a home equity line of credit with your bank to use for surprise expenses. Can be set up in advance and drawn on whenever needed. Interest is typically far less than credit cards or car loans. Use it only when necessary, and have a fast payoff plan.

[disneysteve]

When you get this all cleaned up, you seriously need to start building an Emergency Fund

I agree 100%. And don't wait until the debt is gone to start the EF. Even if you start putting a small amount each month into savings, you'll be better off. Put even $50/month aside and throw the rest at the credit cards.

[bjl584]

OP - Do you have a budget? I'd be curious to see your total financial picture. Mortgage, income, assets, etc.?

You shouldn't be depending on tax refunds and bonuses to keep your finances in check. Having a budget would help your situation tremendously.

[MotivateMe]

I agree 100%. And don't wait until the debt is gone to start the EF. Even if you start putting a small amount each month into savings, you'll be better off. Put even $50/month aside and throw the rest at the credit cards.

Would you not agree with Dave Ramsey and establish the $1000 emergency fund first and then continue paying the cc's?? This way your progress is not derailed when you would have to put a $500 expense on a card and go in the opposite direction? I am just getting started and have my emergency fund in place now and can get started on my debt snowball...