To invest or pay off credit cards first?

**disneysteve** · 06-26-2007, 05:52 PM

Your credit card debt is just $240 so I assume you'll have that paid off very soon. If you have funds available for investing, at 30 years old you certainly need to get started if you haven't yet. Get an emergency fund in place and then start building your retirement accounts and other savings.

**poundwise** · 06-26-2007, 06:37 PM

dis, she says that she has 3 credit cards and 2 car loans, so there is more credit card (and vehicle) debt than is posted in the signature.

I'd paid that consumer debt first; particularly the credit cards.

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As you are following Ramsey's advice, I expect he'd tell you to take a close look at your vehicles. How much vehicle value and how much vehicle debt, do you have as compared to income and how long will your get-out-of-debt plan be with them in tow?

**cptacek** · 06-26-2007, 07:35 PM

First of all, I think it depends on if you have a cash flow problem. Are you hurting getting all the bills paid on time? If so, really attack the loan with the lowest balance. That will give you some breathing room.

Then, I think it depends on what the interest rates are. If you have interest rates over ~5-6%, pay them off. If they are lower than that, go ahead and start investing.

**disneysteve** · 06-27-2007, 04:23 AM

Originally posted by poundwise View Post

dis, she says that she has 3 credit cards and 2 car loans, so there is more credit card (and vehicle) debt than is posted in the signature.

Yep, I missed that and went just by the sig. OP, let's see the true amount of debt and then we can better advise what to do. If there is more CC debt and another car loan beside the 18K Expedition, that's a different story.

In any case, however, I still think a small EF is vital to help keep you from running up any future debt due to "emergencies."

**George23** · 06-27-2007, 12:29 PM

1. Pay off all of the credit cards
2. Get an emergency fund of 3-6 months of fixed expenses saved up in a money market fund (emigrant direct/ ing direct/etc.)
3. Then think about investing

**cptacek** · 06-27-2007, 12:35 PM

Why? Why a knee jerk "pay off all the credit cards first"? What if the credit cards are a fixed 2.99% for the life of the loan? What if it is 0% interest until 2020? I don't think a blanket "pay off all the credit cards first" is correct...let's get some more information about the amount to pay off, the cash flow situation, the interest rate, if the rate is going to go up, etc, first.

**sparkysgirl** · 06-27-2007, 05:58 PM

one is 0% for 15 months that one has 400 bucks on it.
1) is 1200
one is 1500
we have 401k and the emergency savings saved up already. We did everything backwards.
we also have a 5000 home equity line that needs paid off as well. I'm paying off the 400 first and then snowballing onton the 1200 and so on..
We have a little room to invest but I'm worried about other investments I should be making now. I am a stay at home mom and my dh is a truck driver.. I'll say around 50k a year.. not counting funds from his second job since that isn't persistant. (tow truck driver)

**buzz** · 06-27-2007, 07:37 PM

The markets are a bit topsy-turvy right now. Paying off debt and 5%+ Money Markets are a good investment right now, IMHO. If your finances are strong, build a good, solid emergency fund, take the company match in the 401(k), and pay down debt. Having cash flow, savings, and low debt is a great place to be.

**disneysteve** · 06-28-2007, 04:28 AM

Originally posted by sparkysgirl View Post

one is 0% for 15 months that one has 400 bucks on it.
1) is 1200
one is 1500
we have 401k and the emergency savings saved up already. We did everything backwards.
we also have a 5000 home equity line that needs paid off as well. I'm paying off the 400 first and then snowballing onton the 1200 and so on..

I see you changed your sig listing your debts, but you took out the 18K car loan and your OP says you actually have 2 car loans. Can you give us one complete list of debts, the amount and the interest rates? I think that's the info that would allow us to give you the best advice.

**jamai** · 07-01-2007, 05:39 PM

it makes more sense to pay them off first but when it comes to the credit cards, you can do a balance tranfer which would allow you to increase repayments in other areas or save!

**sparkysgirl** · 07-01-2007, 06:01 PM

I'll get to it as it comes in.. I turned in our 18k expedition for a non gas guzzling honda oddesy . it will be paid off in 3 years compared to 5 on the expedition.
we also traded in my dh 98 v8 dakota for a honda civic that will also be paid off sooner. my chase bank card is 0% for 15 months. I do my rebates on that one for the disney rewards.
capital one has a balance of 1225.00 at 2.9%
I'm not sure what our home equity percentage is but it is killing us 5000.00 balance and minimum is 100.00 50 being finance charge!

**sparkysgirl** · 07-01-2007, 06:03 PM

I'm guessing that paying down the credit cards is #1 and I am. I just took over the bills and am studying the dave ramsey method. I've paid one off already and am now working on the capital one. (chase bank will be paid off as the rebates come in since that is all that is on there)

**Tree0164** · 07-03-2007, 03:11 AM

If you have read Dave Ramsey, follow his advice for the most part.

Get current on any past due bills and build your baby emergency fund

I paid off over 20k of credit card debt and have been debt free for several years now. I used the snowball method for getting out of debt which was paying on the highest % credit card and then only the min on the others.

As for the investing itch, still contribute to your 401k to your company match.

To invest or pay off credit cards first?