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Old 01-02-2017, 06:45 PM
 
564 posts, read 869,912 times
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Payoff the smallest first. Cut your expenses as much as possible and consider picking up a part time job, so that you can get rid of the other card debt as quickly as possible.
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Old 01-02-2017, 09:04 PM
 
Location: Vallejo
21,629 posts, read 24,761,074 times
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Quote:
Originally Posted by Pitt Chick View Post
Well, if I happened to carry those balances, I would pay off the small one first.

This gets asked a lot, and there is not a definitive answer.
True.

There's lots of people that like paying more interest out there such as yourself. If someone likes to pay more interest rather than less because it brings them some emotional feeling of well-being to do, then that might be the correct answer. If it would cost an extra $100 in interest but you get more than $100 worth of touchy-feely joyfulness of out of paying an extra $100 in interest, hard to argue that you shouldn't pay more interest. With the relatively small balances and interest rates not being that far apart it isn't like it's going to make a huge difference either way.
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Old 01-03-2017, 10:16 AM
 
462 posts, read 545,684 times
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I say pay down the one with the higher interest first.
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Old 01-03-2017, 10:29 AM
 
26,146 posts, read 21,368,471 times
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The correct answer is the one most likely to help you reach your goal. If your goal is to payoff both cards you really have two options.

Pay off the smaller balance and then pile everything you can into the larger balance monthly including the payment you would have made to the smaller balance

Or

Pay down the larger balance, kept throwing as much as you can until it's gone while making the min payments on the smaller balance. Once the larger balance is gone attack the next.

Method 1 has a benefit often times psychologically, you see immediate progress and it's typcially better for cash flow. Method 2 because of the interest rates saves you the most money but isn't as friendly to cashflow
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Old 01-03-2017, 11:31 AM
jw2
 
2,028 posts, read 3,250,436 times
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There is only one right answer and it has nothing to do with any feel-good feelings, it is simple arithmetic.

Perhaps you should do some modeling using Excel (or similar) to get an idea what different approaches will cost.

It is all about paying the least amount of interest possible.
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Old 01-03-2017, 11:43 AM
 
26,146 posts, read 21,368,471 times
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Quote:
Originally Posted by jw2 View Post
There is only one right answer and it has nothing to do with any feel-good feelings, it is simple arithmetic.

Perhaps you should do some modeling using Excel (or similar) to get an idea what different approaches will cost.

It is all about paying the least amount of interest possible.
This is simply untrue and ignores human behavior. The lowest interest route could well be the route that in excel shows he would pay more interest but if it gets the cards paid off and the other option doesn't excel can't account for that
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Old 01-03-2017, 12:28 PM
jw2
 
2,028 posts, read 3,250,436 times
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Quote:
Originally Posted by Lowexpectations View Post
This is simply untrue and ignores human behavior. The lowest interest route could well be the route that in excel shows he would pay more interest but if it gets the cards paid off and the other option doesn't excel can't account for that
The irony is there is a very large intersection of people that detest big banks yet give them extra money needlessly. I contend that the money saved from paying lower interest overall can be used for any other purpose and provide more satisfaction.
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Old 01-03-2017, 01:14 PM
 
Location: southwestern PA
22,253 posts, read 47,174,114 times
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... and you are entitled to your opinion, as are the rest of us.
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Old 01-03-2017, 01:51 PM
 
26,146 posts, read 21,368,471 times
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Quote:
Originally Posted by jw2 View Post
The irony is there is a very large intersection of people that detest big banks yet give them extra money needlessly. I contend that the money saved from paying lower interest overall can be used for any other purpose and provide more satisfaction.
Well we are talking about big banks or the people that detest them. What we are discussing is the best way to tackle outstanding credit card debt. There isn't a clear black and white IMO, there is the best answer mathematically but that doesn't always work with human nature
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Old 01-05-2017, 07:10 AM
 
Location: Way up high
22,181 posts, read 29,152,023 times
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Always start with the higher interest cards first.
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