I have about 3K in credit car debit and $3,530.15 left owe on a car. I recently had a CD at the bank come up. Its worth 5k. I'm using about a thousand of it to move and want to put at leaste a thousand in the bank so I have at leaste some money in my savings. I do think I should pay one or the other off.
I have about $1,900 on one with an interest rate of 12%,$911.66 that is @ 0% .
The interest rate on the car is high. What would you do?
2007-09-04 04:07:36 · 10 answers · asked by BS and thats no BS 1 in Business & Finance ➔ Personal Finance
I would pay off the credit cards for two reasons.
First it will lower your debt to credit ratio which makes up a full 30% of your score and second the longer you have a car account on your credit the better it is for your score.
Take the additional money that you would have paid the credit card companies and pay it towards your car this will pay it off faster and save you money in interest.
2007-09-04 04:14:55 · answer #1 · answered by ? 7 · 1⤊ 0⤋
You say that the interest rate on the car is high, but you don't say how high. If it is substanstially higher than the interest rate on the cc, pay it off. That way, it's yours. You own the title and you're saving money by not accruing all that interest.
On the other hand, If the rate is lower than the credit card, you may want to consider paying those off instead, saving money on interst there.
HOWEVER, remember that once that balance on the credit card is down to $0, it is quite easy to talk yourself into running them back up again- in which case you would be in the same exact position, whereas if you paid the car off, it would be yours free and clear and you'd be one step ahead (assuming that you wouldn't talk yourself into a new one!!!)
Good luck!
2007-09-04 11:23:01 · answer #2 · answered by silver_squirrel2 3 · 1⤊ 0⤋
I would recommend paying off the car first since the interest rate on it is high (I assume higher than the 12% credit card).
You should always pay off the highest interest rate first and then work your way down. Don't skip payments for anything... ust pay the minimum balance due on the lower cards and then apply the payments from paid off balances to the next higher card until you are out of debt.
Best of luck!
2007-09-04 11:13:51 · answer #3 · answered by Richard H 2 · 1⤊ 0⤋
always pay off the debt with the highest interest rate....consolidating debt is always smart...if the 0% APR is for the CC...put the car on the credit card, pay the balance gradually with whatever is left from the cd
if you need to improve on your credit (bring it up)....pay the 0% apr off first and make accurate payments for the other monthly and on schedule. once the credit card is paid off, don't close it. closing credit cards can bring down your credit card also. best bet if you dont need it or want it anymore....just cut it up and leave the account open.
2007-09-04 11:17:39 · answer #4 · answered by dEE 2 · 0⤊ 0⤋
Pay off the cards first. You can always sell the car if you need to, but the credit cards will always be there.
2007-09-04 12:23:19 · answer #5 · answered by Jay P 7 · 0⤊ 0⤋
Pay off the one with the highest interest rate,those credit cards will get you in the end.I know they are a handy thing to have but be careful,they will eat you alive.I have one but only use it in a emergency,which have had to use it once.
2007-09-04 11:18:06 · answer #6 · answered by ronald m 3 · 0⤊ 0⤋
pay off credit cards, then start sending extra into your car payment each month. But if you have no problem making
your payments and are not behind, I put the money back
into another CD
2007-09-04 12:22:33 · answer #7 · answered by Anonymous · 0⤊ 0⤋
Pay off your credit card and in the future pay it off every month.
2007-09-04 11:10:05 · answer #8 · answered by Suzy 5 · 0⤊ 0⤋
Pay the cc debt first.
2007-09-04 11:11:34 · answer #9 · answered by jacks 2 · 0⤊ 0⤋
flip a coin...then get out of that credit card!!
2007-09-04 11:15:33 · answer #10 · answered by Anonymous · 0⤊ 1⤋