Question

Which one should I pay towards? I understand the normal snowball method but would love to hear your thoughts>>>>>>>> Thanks! 1. Credit Card--Lowest Balance: $7, 550 *No interest until 12/21then 15% after ______________ 2. Loan --BUT Higher Interest: $10, 300 *Interest rate of 8. 5% in effect now

Answer 1

I personally would pay off the one with no interest first because if it’s not paid off by next year you will get hit with interest back dated to the first purchase.  

Comments

Agreed. Those 0%apr are not joke. If you have even . 50 cents left they will charge you the interest on the entire initial transfers. They are serious.  

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@sklar7273 yes! I learned the hard way (20 & dumb). With a balance that high, I would be worried about what the back interest would end up being. Plus when it gone you can snow ball the payments.  

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I 100% agree. We had this happen to us. We KNEW we could pay it off in time but we kept prioritizing other things. And the month before we were able to pay it off, we were hit with $1500 in interest. That was painful.  

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@hysterectomize yes ma’am! I used a zero interest card to pay for my laptop when I started college. Had it all paid but $20 and was hit with $1800 in interest.  

Answer 2

Highest interest.  

Answer 3

I would do #2

Answer 4

I would say focus on the higher balance, because of the interest.  

Answer 5

I’d do #2 as well!  

Answer 6

For #1 when the interest starts is it like 20% or something rediculous? If so I'd get rid of that one first.  

Answer 7

As long as you pay $398 per month on debt number 1 pay everything else towards number 2 otherwise you will also have to pay interest come December of 21’. Do you think you could pay off 17, 850 by December of 21’ if so pay it all at debt 2 first!  

Comments

@spreader71102 I agree! Best to make sure you do monthly payments to avoid the interest of one. At the same time attack 2

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This is what I would do!  

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@spreader71102 this is what I would do as well.  

Answer 8

Debt 2

Answer 9

Ask yourself will you be able to pay these two off within 18 mos (12/21) if you go with #2? Also what will the interest be after 12/21. I'd personally go with 1 because we missed our interest free period and the interest was outrageous and the balance went almost double after time.  

Comments

Sorry should have been more specific. #2 is a loan and #1 is a credit card.  

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@extensity got it - I'd still pay off #1. 15% is pretty high and higher than your other loan. If you have Excel or know some one you're comfortable giving your #'s to plug them into the formulas.  

Answer 10

I’d pay off #1 so you don’t get hit with the interest once Jan 2022 comes around. They’ll make you pay back interest which would set you back further

Answer 11

Still 0% because you will get charged all the back interest if you don't pay it off before then.  

Answer 12

Be careful with anything that is "no interest until X". If you rolled a balance onto that card they might require that to be paid by the end of the no interest period. If it isn't, they might charge you all the accrued interest since inception. I would suggest paying off the credit card first. Pay that off and cut the credit card up and / or cancel it. Then work on the loan. Either way, create a plan of attack and stick to it. Don't go back and forth on it.  

Answer 13

Tackle the interest free one first! You do not want to be stuck with all the accrued interest if it doesn’t get paid. Once that one is taken care of, you can throw all the extra at the higher interest one and knock it out quicker

Answer 14

I’d tackle the no interest rate now-take advantage of that deal.  

Answer 15

How much will the interest be on the first one? Even without know the interest rate i would pay off 1 ASAP. You will accrue sooo much interest if it's not paid off by the end of the promotion. You will also end up with a much larger monthly payment.  

Comments

Yea i would definitely go with 1

Answer 16

I would knock out debt 1 now

Answer 17

Get rid of the no interest credit card loan now so you don't face any penalties later

Answer 18

Not sure what your minimums are or how much you have to be able to put towards debt, but if you pay 420 towards #1 each month it’ll be paid off a month early, (gives a little wiggle room for you) and everything else I’d put towards #2

Answer 19

I would pay down the CC and then once that is done target the loan

Answer 20

For sure #1, pay it off before that high interest rate comes into play. Plus, snowball method wins everytime. ☃️❄