I have $1000, Which card should I pay down?

[Redlight]

Long story short... Built up some credit card debt after a car accident years ago. Was paying it off pretty well (Always pay $50 per card, then an extra $50 to the card that can be payed down the quickest. Per month), but lost my job in Feburary and was unemployed for 2 months. Ended up living off credit cards, and made my debt go up.

I am currently paying a ton on car insurance and car (488 ins, 322 car), and struggling... But that should clear up by Feb. Added bonus, I just got a promotion at work (starting the 26th) and will be making $1 more per hour, and getting $200-400 extra in incentives.... So, I plan to aggressively tackle my debt at that point.

I also run a small business that is somewhat failing, and that is a reason for some of the debt (buying inventory, but losing places to sell it. Still profitable, but it varies by month).

So, Onto my point of me joining and posting... I bought a car 2 months ago for $400, and I just sold it for $1100 today. I plan on putting the entire amount towards debt relief..... But I am unsure how to go about it.

Is it smarter to pay off the couple cards that are under $1000? Or should I aim for the highest balance or highest APR and pay off as much of that card as possible?

My accounts:
Paypal: 1,340.98 (Interest: $23.26, 19.99%)
Chase 1: 1220.30 (Interest: $15.73, 14.49%)
Chase 2: 684.32 (Interest: $14.07, 21.49%)
Cap: 175.47 (Interest: $2.27, 16.05%)
CarCare: 1136.16 (APR 29.99%)
Best Buy: 1627.92 (Interest: $13.38, 24.49%)

XX months no interest promos I have ending soon:
Best buy No interest promo ends May 5 2017 (979.98)
Car Care No interest promo ends 3/9/17 (205.77)

Once they are all paid off...... I don't plan on using the Paypal credit account anymore. Best buy is my oldest account, so I hate to see it close (For credit's sake). The cap/Chase accounts are pretty easy to use and pay off so I will probably keep them open for the sake of building credit. I only use Car Care for car emergencies... Hopefully I will never need it again.


Thank you to anyone who can offer advice!!

[Jluke]

welcome, you will want to google Dave Ramsey and read about his approach to debt/finances - it may work for you. Don't feel like you have to do everything exactly as he says, but it could be a good framework for you.

First, get an emergency fund of say $1000 so you don't find yourself needing to borrow again for unexpected things.

Then, I would recommend paying off a card(s) in full (so lowest balances) as that will free up your monthly cash flow. So Chase2 and Cap or Car Care (0%) could be paid off tomorrow. This will lead to the snowball effect you will read about on Dave Ramsey since you can apply those monthly payments to your other debt.

[kork13]

I'll apologize upfront for being blunt... But wow, that's a pretty awful debt profile. You've got interest rates between 15-30%!!! You're just lucky that the highest two are currently zero interest. Even still, you've got about $6k in debt at an absurd cost -- that's just burying you with interest.

To your immediate question: Put all of the cash into the Car Care CC. I don't care if it's 0% right now, if you can't have it paid off come March, it's going to gut you like a fish. Focus on paying off those two highest-rate credit cards, because they need to be gone before they start accruing interest. **I'll add the proviso that if you're confident that you can pay off the Car Care card before March, go ahead and pay off Chase 2, Cap, and reduce the PayPal balance.

On the whole, my best recommendation is to consolidate the highest-rate debts (or as much as you possibly can) into a lower-rate loan, then pay it all down ASAP from there. If possible, a new 0% credit card offer to give you 12-24 months to clear the debts would be fantastic. However, even a 10% unsecured debt consolidation loan (available from most any bank/credit union) would be better than any one of the cards that you've got right now.

It's great news that you're getting a promotion & more income! You need to also trim your expenses as much as physically possible, and focus all of your spare cash to clearing your debts. It's unfortunate that you've found yourself in this situation... But realistically, it's "only" $6k -- with some focus, you should be able to clear it within 12-18 months, even faster if you can cut down your expenses.

One last note:
A credit card with 30% interest is a horrific backup plan. I can't stress enough the importance of having an actual emergency fund. Start with just $500 or $1000 if necessary... but you need SOMETHING in savings to backstop you against any unexpected surprises. Yes, even now, when you are knee-deep in debts & climbing your way out, you need some savings to keep you from building up your debts again.

[GoodSteward]

If you don't have an emergency fund I recommend the money going towards that. However, we throw that advice around all the time to people never knowing what they plan to do. An emergency fund is an avoid debt fund. If you are done with debt and want out then you must have a different fall back other than a credit card, which is an EF. If you plan to still use a credit card for emergencies (legitimate emergencies) then I recommend paying off the smallest cards all at once. This will give you a good boost emotionally seeing two cards paid off, and off your list. You have some lousy interest rates, but at the end of the day 6k of credit card debt (I didn't add it up just going off someone elses post) isn't catastrophic. Not unless you have no cash flow, then even a 25$ min payment is dangerous.

I say all that about the EF because you are asking for advice with 1000$ as if it is a big deal to you. I would imagine that means you probably are not used to having 1000$ which means most likely no EF. I could be wrong, but just the impression I've taken away.