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I need your help. I have a question for you all.

October 5th, 2014 at 01:11 pm

Hi all!

It's been a awhile but I haven't stop working on paying off debt and saving.

I've been on the new job now for three months and was able to sock away a little over $1000 to rebuild my EF. I've also been able to add about $200 to my IRA account. Not much but something is better than nothing. Not to mention I've been getting the debt down as well.

So I have a question for you all. I have an extra $500 set aside, different than my EF.
I owe about $450 on a no interest CC, interest doesn't start until 2016. I'm sure I'll have it paid off before then. I owe about $1400 on another CC, with interest. I'm not sure if I should pay off the no interest CC first or add the funds towards the CC that is accumulating interest. If I was to pay the $500 on the interest CC that will bring the balance down to $900. Next Tuesday is payday and I can add another $300 on that balance, leaving a balance of about $600. So I wanted your thoughts, which should I pay off first?

I like the Dave Ramsey way of paying off debt starting with the smallest debt, it just seems like I'm accomplishing thing.

Posted in Debt | 4 Comments »

4 Responses to “I need your help. I have a question for you all. ”

  1. Ima saver Says:
    October 5th, 2014 at 02:24 pm 1412519073
    1412519073

    I would pay off the credit card that is accruing interest first.

  2. Kiki Says:
    October 5th, 2014 at 04:43 pm 1412527388
    1412527388

    I would also pay off the card with interest.

  3. scfr Says:
    October 5th, 2014 at 06:19 pm 1412533175
    1412533175

    I don't think there is an easy answer because there is something to be said for the psychological gratification of getting something paid off, but there is also something to be said for cutting down on the total amount of interest that you pay to the credit card company. One approach is more heart (psychological) and one is more head (numerical).

    Even if you decide to pay off the one with interest, you want to be absolutely sure that you will get the 0% interest one paid off in plenty of time with some wiggle room (because "life happens").

    What about a "balanced approach"? You could pay $50 or $100 per month toward the no interest card and put any other money you can squeeze from your budget toward the card with interest? That way you could get the no-interest card paid down pretty fast while also chipping away at the card with interest.

    Also, have you thought ahead to Christmas? Will you be able to get gifts without racking up any new C debt?

    Good luck!

  4. Amber Says:
    October 5th, 2014 at 08:27 pm 1412540872
    1412540872

    Thanks everyone. I've decided to pay off the no interest card, and paying $500 on the CC with interest. My thought is the money freed up with the no interest I can add towards the CC with interest. I know it's not the best move financially but it does give me a sense of accomplishment.

    SCFR, I've decided this year I won't but any Christmas gifts. The good thing is I will earn a $25 gift card for participating in my job's wellness program. That will go to my neice. I also earned a $25 gift card from mypoints that will go to my nephew. And I've earned $50 gift card from Humana that I can split between my three great nephews.

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