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Posted: Sat Oct 27, 2007 7:56 pm Subject: simple questions about debt

so i have about 7,300 dollars of debt. now i have one low 5.7 percent interest rate on a card with a 1,150 dollar limit on it this is the card i use to transfer my higher balances to since each other card has about 17+ percent interest involved with it. now comes the question...is it better to keep paying as much as i can to this card to pay off the 1150 off of it asap since the 5.7 is an special 6 month thing then will fall to 3.9 back up to 5.7 etc. then when i free up this card to zero transfer another 1150 from my higher interest rate cards and pay the minimum balance on these cards and pour as much money into the the 5.7 apr card as possible then repeat the process till i no longer have debt or would it be wiser to pay little chunks off the higher interest rate cards??? i mean the real question is whether that is even a smart way of doing this.

Posted: Sun Oct 28, 2007 6:00 am Subject:

I would pay the higher interest rate cards first, but that is just me. I am thinking if you are paying the lower interest rate one, the higher interest ones are still accruing their high interest. The best thing would probably be to sit down and figure out how much extra you can send then figure out which way would save you the most money.

Posted: Tue Oct 30, 2007 8:34 am Subject:

Definately pay higher interest rates first pybasj but I think they mean they are using the low rate card to make payments on the higher rate cards... then paying actual cash into the lower rate balance so they free room up on the lower rate credit line. Robbing Peter to pay Paul?

Am I right Abdotone?

Posted: Tue Oct 30, 2007 3:28 pm Subject:

Honestly, I wouldn't worry about the interest rates. You really won't save that much more money by doing so. What I would recommend is, list you debts smallest to largest. Pay minimum payment on all of them except the smallest one. Attack that smallest one with a vengence. Once that one is paid off, take what you were paying to that one and apply it to the next one in the list plus what ever else you can scrape up. Then continue this process until all of your debt is paid off. This is called a debt snowball.

Posted: Tue Oct 30, 2007 4:02 pm Subject:

I agree with Pybasj-pay off the highest interest rate first. Paying the smallest one the most is ok but you are still paying a large minimum on a high finance card. I'd want to get the largest one away.

Posted: Tue Oct 30, 2007 4:20 pm Subject:

hntr8541's approach will best benefit your credit score and I would take that approach! Your score vastly improves when you have 30% or less of your balance charged on any one card.

Posted: Tue Oct 30, 2007 8:15 pm Subject:

Interesting...I thought it'd be the other way around...paying on the highest card first & bringing that one down would be a better benefit than paying the smaller balances, but I see what you are saying VBM. You learn something new every day Smile

Posted: Wed Oct 31, 2007 5:23 am Subject:

Tackling the smaller cards will give you a greater yield of smaller balances quickly.

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