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Unfortunately we have about 7500 CC debt from helping my grandfather pay for hospice last year. Our tax return is coming soon and we want to pay off one, but can't decide which.
Car loan has 5800 left. Costs use $400 per month
CC debt is 7500, we pay out $200 per month.
I want to pay off the car. That extra $400 can help us pay off the CC faster. DH wants to pay the CC because the interest rate is higher. WWYD?
Location: Huntersville/Charlotte, NC and Washington, DC
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Quote:
Originally Posted by StephM
Unfortunately we have about 7500 CC debt from helping my grandfather pay for hospice last year. Our tax return is coming soon and we want to pay off one, but can't decide which.
Car loan has 5800 left. Costs use $400 per month
CC debt is 7500, we pay out $200 per month.
I want to pay off the car. That extra $400 can help us pay off the CC faster. DH wants to pay the CC because the interest rate is higher. WWYD?
The credit card payoff would raise your credit score more especially if that $7500 is on one or two cards with a limit with say $10k total. It will knock down that utilization.
I'd also pay the car. It frees up an extra $400 a month to pay on the CC. You'll pay the CC off in a little more than a year with the extra payments. Also, depending on the age of the car, you could actually drop the full converage insurance, which would give you an additional amount to put on the CC. Important thing is to make sure you're not still charging on the CC. You insinuated that you had enough to pay the CC off. If you pay the car off instead, that will leave an extra $2K to pay down the balance of the CC>
The interest you save by going one way over the other is not overly significant - especially if you're talking about getting serious about knocking both of them out.
Unfortunately we have about 7500 CC debt from helping my grandfather pay for hospice last year. Our tax return is coming soon and we want to pay off one, but can't decide which.
Car loan has 5800 left. Costs use $400 per month
CC debt is 7500, we pay out $200 per month.
I want to pay off the car. That extra $400 can help us pay off the CC faster. DH wants to pay the CC because the interest rate is higher. WWYD?
What are the interest rates and how much money do you expect to get?
I'd pay off the car because if you happen to lose your ability to pay it can be repo'd. Nothing worse than to lose your car and have no ability to buy another.
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