Question

I've been struggling with this for awhile of how exactly to handle my debt payoff journey. I can only afford to pay an extra $100 each month. Should I pay off my credit cards first or should I tackle the high interest loans I have? My problem is I would be tempted to use my credit cards if I see money available on them. I have my emergency fund and also save for Christmas and birthdays for my kids. Here is a list of my debt : Mariner Finance 29. 75 % payment : 184. 79 balance : 4305. 11 Reginal Finance 30. 95% payment : 138. 82 balance : 2721. 65 Capital One 25. 49 % payment 25. 00 balance : 457. 87 Capital One 25. 99% payment 25. 00 balance : 479. 34 Any help will be greatly appreciated. :)

Answer 1

If you know you would be tempted to use CCs that have an available balance then I would start with the loans. Paying the loan first will give you the time/opportunity to feel/see what budgeting and paying of debt does for you and will possibly help change your mindset by the time you get to the point of paying off the CCs.  

Comments

@heydon30 I like the way you think. :)

Answer 2

I would cut up the credit cards then work on paying them off

Comments

@roybal why credit cards first ?  

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@trumpery9 lower balance get them knocked out frees up the payment to put towards the loans

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@roybal true too but my brain says it's only $25 extra a month and if I knocked out the larger ones first that's way more money to use to get these paid off as well.  

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@trumpery9 The other thing to consider is how long it's going to take you to pay off. Since your extra payment amounts are fairly small it would take you years to get your larger loans paid off so you're not going to get the extra from those payments for a long time. If you start with the credit cards you should be able to pay both off within a year and then you'll have $150 extra a month to put toward the larger debt! Neither option is wrong just something else to consider. If I were you I would cut up your credit cards and pay those off asap!  

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@kenley according to the debt payoff app I will have everything paid off by the end of next year.  

Answer 3

I would freeze/cut up the cards/erase their # from apps regardless of what debt you choose to go with first. That's what I had to do, and it helped my habits a lot.