+26 votes
by (320 points)
Question.  I need some advice on what you would do in this situation.Question. I need some advice on what you would do in this situation. $7500 cc 0% for 18 months to pay off it is $362 a month $7900 cc %17 min payment $159 a month $2500 on car loan $440 a month $8000 in savings Should we take $7000 out of savings, leaving $1000 emergency fund and pay it towards our 17% cc? We only have 5 months left on the car payment.  
Question.I need some advice on what you would do in this situation.

18 Answers

0 votes
by (190 points)
I'd definitely pay off the car loan first.  
by (320 points)
There is no interest on that anymore. It came off the top of the loan.  
by (190 points)
@sourwood it still makes sense paying them first it will give you a bigger shovel to pay the rest
by (170 points)
@immensity I agree. and since you're used to paying the $440 a month, keep that in your budget, but put it towards the credit card. you won't miss the money if you've already been spending it
by (320 points)
So pay off car with savings and put $440 towards card with interest?  
by (190 points)
@sourwood yes along with some of the other money
0 votes
by (150 points)
Oof tough one but I would pay off your car! It’s yours already because you have that money there! Imagine a paid off car. Then go gazelle intense and attach the 17% one.  
0 votes
by (200 points)
Actually I think I would pay off the 7500 cc that has a 362 payment. Then take that payment and put it toward your car loan once that’s paid off throw the 800 to the last cc 7900.  
by (320 points)
The 7500 card is 0%
by (200 points)
I understand it is a big chunk of $ that you can use to throw at the others. Pay off the car and whatever money towards the cc get it paid down faster then throw it at the last one which is the 7900.  
by (320 points)
Got you! That does make sense!  
by (110 points)
I completely disagree. Keep the 0% interest and pay toward the one actually costing you
0 votes
by (740 points)
I would pay off the car and put the remaining on cc principal. Then I would use the 440 payments on the cc with interest.  
by (160 points)
@roberts79 how do you make sure it goes to principal?  
by (740 points)
@saylor If I want a payment to go directly to principal I write a check and write “Apply to Principal Only” on the memo line. I’ve never had any issues doing it this way.  
by (160 points)
@roberts79 awesome! Thx
0 votes
by (150 points)
Pay the car off. Use that $440 towards your next lowest amount. Snowball effect. As you pay stuff off, you keep adding that payment to the next loan. You got this!  
0 votes
by (320 points)
So you guys don't think we should take out of savings?  
by (200 points)
@sourwood they’re saying to snowball the payments once you clear the debt using your savings.  
by (110 points)
@sourwood Yes, since thankfully you have a good stash! Car monthly payment could go towards CC with highest interest.  
0 votes
by (190 points)
I personally have over 1k emergency fund. That's up to you to know what your comfortable with
0 votes
by (200 points)
$7000 -> $2500 on car and $4500 on 17% cc Then $440 + $159 per month on the balance of that cc and will be paid off in 6 months.  
by (110 points)
0 votes
by (150 points)
Pay off the car loan, then put the rest towards the $7900 CC with 17% interest. Then put the extra $440 you were paying for the car loan and put it towards the remaining balance until paid off. Should be paid off in 6 months!  
by (110 points)
0 votes
by (150 points)
So I ran your scenario 2 ways. paying the 17% card first or paying the car off & the balance to the card. Either way, it will take 6 months to pay both off fully. But if you pay $7000 on the card now, you will pay only $45 in interest over those 6 months vs if you pay off the car & pay down the card to $3400, you will pay $170 in interest. There’s no benefit to paying down the 0% interest card first because it won’t make the other payoffs happen faster & you’ll pay way more in interest. And after the 6 months, make sure you put those payments from the paid off card & your car to the 0% card. You say it’s 0% interest for 18 months but at $362/month, it will take 21 months to pay off so you’ll get hit with some interest in the end if you don’t.  
by (150 points)
I run numbers this way every time I can’t decide what to pay. I use a remaining balance calculator & a pay off loan calculator to map out my snowball & determine which debt to tackle next.  
by (110 points)
Makes me wonder what the interest on the car is though. That could make a difference too
by (150 points)
@detinue she said somewhere (in the comments maybe) that all that’s left is principal on the car - all the interest was paid up front.  
by (110 points)
@sitology77 oh ok, so yes, I agree with you completely then! Some of the comments on here make no sense. I cant believe others are telling her to pay the 0 interest first. I think your idea is the best.  
0 votes
by (600 points)
I’m all about saving interest. I would pay off the credit card with the 17% first. Maybe use $5000 in savings and transfer the rest to a different 0% card. Last year I transferred a balance to a Discover card with no fee and no interest for 12 months. Helped me pay down some medical bills and car repairs I had ‍♀️
0 votes
by (150 points)
Take the 2500 and pay off the car loan. From there use 300 of it to put towards the cc with the highest interest the balance of the car payment -140 put back into savings each month
0 votes
by (200 points)
Pay off the car loan first. That frees up $440 an month automatically and you can start putting that in addition to minimum payment toward the higher interest rate card. I’d also put some from savings toward the cc
0 votes
by (250 points)
Do you own your home? What is your homeowners insurance deductible? Ours is 1500 so I keep that much in my emergency fund not 1000. That leaves 6500 for debt. Pay off 2500 car payment (I know it only has 5 months left to age out BUT it is your largest payment to snowball into the other debts) Then I would put 4k to your 0%card - yes it is 0% and the other is gaining interest but it will be 3k with an extra 400/m it'll be gone before you know it and then the snowballed payment on the other credit card will knock that out super fast too
by (320 points)
We do not have a house payment and our homeowners is paid with my families llc.  
by (320 points)
And we don't have to pay the $360 a month on the 0% that is just what needs paid to have it paid of before the 18 months are up.  
0 votes
by (200 points)
I agree. If it was me, I'd pay the car right now and use that extra cash towards the cards. Depending if you think you'd be able to pay off that 0% before the 18 months came up, I'd work harder on paying of the other one. I like having money in savings, but I agree with @throe, I wouldn't add any more. Get rid of that debt. You will absolutely LOVE the feeling of having that car paid off and having that extra money a month once this is all said and done.  
by (320 points)
I agree! Thank you!  
0 votes
by (1.7k points)
I think anything you do is a really decent option. If it were me though and I was used to have $8k in savings, I might feel more comfortable leaving $2-3k in savings and using the rest to throw at debt. I would pay off car first and then the remainder toward the 17% but also increase my monthly payment by the $440 that’s no longer going to the car, plus any other money you can find. I wouldn’t add more to savings until the remainder of debt is paid off. You got this!  
0 votes
by (150 points)
Since you said you have no more interest on the car loan, I’d pay off the the 17% interest card first. Then finish that payment as quick as possible and flip it to the car loan. Then you have an extra $600+ for the last CC.  
0 votes
by (150 points)
I use a site called undebt. it to figure out payment plans. It can help you figure out the fastest way to pay off your debt using snowball, highest interest first or a custom combination of different methods. I find it really helpful in these kinds of situations. I would say deal with the high-interest card first since you aren't paying interest on the car loan. That 17% is going to cost you a lot more money over time.  
by (740 points)
@wallah Do you have to pay to use this site?  
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