Another Debt scenario

[LuckyJB]

I would pay off CC#1 & #2 immediately and then quickly work on #3. You will be surprised how great the feeling will be and just eliminating it from your list. It will become addicting once you do that.

[Jluke]

And if you continue to pay just the $256 credit card it will take upwards of 7 years to pay that off.

I imagine the car loan will be paid off before then with just the required monthly payment.

So while on paper it appears the CC has a lower monthly payment, in reality it is a very expensive debt. Funny how the CC companies don't require a higher monthly payment. They love that interest charge!

Note: I just wanted to add that detail for others who might be reading this.

[asb2012]

Very true and yes it is about $150 a month

[Jluke]

I was thinking to start snowball on my vehicle first and pay it off then move to my credit card. I think that mentally it would keep me motivated knowning i would free up extra $355 in income however i onow that would not be the best move because the interest is higher on credit card ��. What would u suggest? Also one month of extra earned income or it can come from savings has to go towards taxes.

credit card first - the balance is only $1000 more than your car loan but the credit card interest rate is going to hurt you more than the interest on the car loan. just like you said but remember:

while credit cards have a "minimum payment" you really should be paying that off each month (once you are out of debt and can manage credit wisely). that will be a better habit to form vs. freeing up $355 from the car loan. IMO.

ETA: I did a rough calculation on the CC interest - looks like you're paying around $150/month in interest right now.

[asb2012]

Ok so Thank You for the help so far i hope i am doing this right i am really wanting to get out of debt it is a real mental burden for me. Ok so here is my update since October

Debt Total $48079

Veh Loan $11563 @ 3.5% payment is $355

CC#1 $12516 @ 14% payment $256

Student Loan $24000 @ 4.2% payment $289

Income still the same $5900
Monthly Expense $4640
Extra income $1260

I still having savings of $8100 reason is my SO received bonuses at his job that we used towards the debt not sure if that was the right move or wrong thing but we did it😕 So this is where I am. I was thinking to start snowball on my vehicle first and pay it off then move to my credit card. I think that mentally it would keep me motivated knowning i would free up extra $355 in income however i onow that would not be the best move because the interest is higher on credit card 💳. What would u suggest? Also one month of extra earned income or it can come from savings has to go towards taxes.

[Outdoorsygal]

If you can get another job, even at minimum wage one day per week, you could pay off things alot faster.
If you are already at a high income bracket, maybe something under the table or a side hustle (independent contractor/business owner).
Or figure out ways to save $$ and/or make money while on the job during downtime. Something that wont' affect performance.
Just some thoughts...

[FoolFromAZ]

I would sell the call immediately and buy something for 2 or 3k. if I have that much of cc debt with that much high interest, no way I would keep car that is worth 10+ K.

[MooseBucks]

I respectfully disagree with the order after CC2 - that is following ramsey to a tee, BUT the auto loan should be dead last; it will probably be retired with the natural payment plan prior to the student loan.

Specifically, the balance on the auto loan is not much different from CC3 ($600), but the interest rate is 3.5% for auto vs 14% for CC.

X2 no way would I pay off the car before CC3.

[thestrongprofessional]

Selling your car?

The advice on this forum has been great. You should definitely focus on paying off your smallest debt first and use some of your savings to pay off the first 2 credit cards. Have you also considered selling your car? Depending on your car's value, you may be able to free up another $5,000 - $6,000 by downsizing your car and buying something more economical. These funds would help you towards your cause and allow you to become debt free much faster.

Raphael

[Petunia 100]

Percents don't start until later in grade school, just an FYI.

Grade school is elementary school, so I'm not sure what distinction you are trying to make.

[scfr]

I was not expecting for anyone to say use my savings for cc1 and cc 2. Yea i was leaning towards paying off cc#1 first. Im nervous about letting go of my savings some but i trust the advice from these forums. So i will be paying off cc#1 and #2 by Wednesday Then work towards the 4 months of building savings back up and paying down cc#3

Good. Scrutinize the expenses to see if there are areas where you are willing to cut back to get that 3rd cc paid off more quickly.

[GoodSteward]

People who grasp elementary school level math.

Percents don't start until later in grade school, just an FYI.

If your goal is to avoid using the credit cards again do NOT use most of your EF to pay off debt. Use some, but don't let it go down to just 1k, or you will likely break out a card again sometime during the repayment period. Just my .02$

[Petunia 100]

Who cares about the interest rate. If you pay off the smaller amounts first then you have more money to pay off the bigger amounts.

People who grasp elementary school level math.

[Jluke]

Who cares about the interest rate. If you pay off the smaller amounts first then you have more money to pay off the bigger amounts.

Ramsey does: " The smallest balance should be your number one priority. Don't worry about interest rates unless two debts have similar payoffs. If that's the case, then list the higher interest rate debt first."

CC3 wins over auto.

[puck36]

I respectfully disagree with the order after CC2 - that is following ramsey to a tee, BUT the auto loan should be dead last; it will probably be retired with the natural payment plan prior to the student loan.

Specifically, the balance on the auto loan is not much different from CC3 ($600), but the interest rate is 3.5% for auto vs 14% for CC.

Who cares about the interest rate. If you pay off the smaller amounts first then you have more money to pay off the bigger amounts.