I'll make it simple and short. I have $1,000 left in my savings account.
I have just one credit card left to pay off--$2,000; I'm paying about $35 interest on every month on the balance.
I also have a personal loan to payoff--$3,800 left. I'm paying $220 month which is going to take until mid 2008 to pay off.
Should I put the thousand towards the credit card or the loan?
thank you
2007-01-17 09:35:48 · 12 answers · asked by jon 1 in Business & Finance ➔ Personal Finance
i would have to say for you to pay it to the credit card because you will only have 1000 left to pay on the credit card and you can get rid of that bill sooner and only be left with one bill.
2007-01-17 09:46:43 · answer #1 · answered by kimnicole07 3 · 0⤊ 0⤋
Questions back at ya:
What's the interest rate on the savings account? Almost surely it is less than the credit card.
What are the rates on the loan and the card? Choose the one that is the highest interest rate, if you are looking to make the financially most sensible decision. If there are personal reasons to pay off the loan first, then only you can make that decision. But otherwise, pay off the most expensive debt first...usually that is the credit care. Only loan sharks and credit cards charge 17-29% interest rates!
2007-01-17 09:42:01 · answer #2 · answered by kingstubborn 6 · 0⤊ 0⤋
keep the $1000 in a high yield savings for emergencies- if you use it to pay off the debt(which isnt very bad by the way) an emergency could come up and you will be right back where you started.
if you really want to pay these off i would suggest increasing your income by finding a second income or asking for a raise or just keep doing what you are doing and the debt will go away eventually
do you have anything of value to sell that you dont need- probably what got you in debt in the first place so sell some of your stuff if that is an option.
2007-01-17 09:44:12 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Keep paying the loan as usual ($220) and pay off the credit card with the rest ($780), accumulating interest is a waste.
2007-01-17 09:40:56 · answer #4 · answered by Ilich 2 · 0⤊ 0⤋
The credit card since you have interest, if that sits for a long time you will end up paying more than just the 2000.
2007-01-17 09:39:57 · answer #5 · answered by Smart1 3 · 0⤊ 0⤋
Put it toward the one with the highest interest rate.
It will end up saving you more money in the long run to pay off the high interest rate loans first.
2007-01-17 09:44:51 · answer #6 · answered by texas_boone 2 · 0⤊ 0⤋
Consolidate your depts. Your line of credit is probably less interest (most I think are) so pay your credit card with it, and concentrate on having just one bill to worry about. It will save you in the long run.
2007-01-17 09:47:52 · answer #7 · answered by Jennifer M 2 · 0⤊ 0⤋
Neither. If you're able to pay both accounts without running up additional debt then you're better off keeping the saving for an emergency or for that time when you can't pay the monthly minimum.
2007-01-17 09:46:32 · answer #8 · answered by Oh Boy! 5 · 0⤊ 0⤋
I would keep the 1K as an emergency fund to keep from incurring debt when for example the car breaks. Hunker down and pay that debt off with other funds. And quit using credit cards, they are a trap designed to keep the bank rich and you poor. (Slaps hand)
2007-01-17 09:46:16 · answer #9 · answered by steve.c_50 6 · 1⤊ 0⤋
Credit card I am sure it has a higher interest rate
2007-01-17 09:43:59 · answer #10 · answered by Anonymous · 0⤊ 0⤋