debt question

[bonnie&clyde]

Whatever you do, clear this debt up before even thinking about a boat. The payment and slip fees are only a portion of ownership costs.

Yeah that's what we are trying to do, we could be completely debt free by March or 2012

[mustangguy289]

If you have discipline and are with longer term goals... pay the highest interest first. If you are not disciplined and need quicker gratification... pay the smaller balance off first for that sense of accomplishment.


Depending on how much you are sending in each month... the monetary difference between the two methods may be very small.

[mustangguy289]

how is it common sense covered? if i have a balance of 1800 with 24% interest but 4000 with 15% interest does it not make more sense to pay off the 4000 since i will end up paying more on it?

In this case.... worry about the 1800 first. This serves both methods.... highest interest and lowest balance.

Yes, it will look like you are paying more interest on the $4000 because it is a higher balance. However, the 1800 has the higher interest costing you more for every dollar borrowed. ( Without worrying about compounding.... you are paying 24 cents for every $ borrowed vs 15 cents for every dollar borrowed on the other card.)

See if you can transfer the 1800 to the 15% card and have 6800 at 15% and only have one thing to pay off at a lower interest.

[Stroked87]

Always amazes me when people use credit cards for perishable items. My ex used to do this and it drove me insane.

[Stroked87]

Oh, and to answer your original question, pay off the smaller balance first (especially since it is the higher APR) then after that is gone pretend you still have that payment and add it on top of whatever you are paying on the other card.

[SSMAN]

Credit score is a lot about "available credit". Even if you owe $18k on a $20k limit, it's better than having a $2k card limited out. Funny...

True, a lot of it is based a person having the credit, but also having the self control not to use it all. I took a tad bit of a ding when I canceled my $40K limit Citibank card.

Never understood their thinking. I was putting $20k a year thru the card and I asked them to waive the annual fee. I had the card for over 10 years. They refused, so I canceled it. Some genius made that decision, because they made a lot more than that $50.00/year on the charges I put thru it.

[GE]

He's thinking about buying a boat, too? lol @ having a credit line with 24% interest and even CONTEMPLATING a boat.

[Grape]

i live in the wrong world