Ok peoplethanks in advance, i owe about $3700 ($2500 to one credit card and $1500 to the other) in credit card debt, i am gettin $3500 soon, my question is, what would be better if i pay off $ 2000 to one and $1000 to the other one. or would it be better if i pay off the one that i owe $2500 entirely and whatever i have left to the other one?
2007-11-27 02:03:40 · 6 answers · asked by shortyXXX 1 in Business & Finance ➔ Personal Finance
thank you guys for all your advices, im gonna pay off the one with the highest interest, and the rest of the $ use it for the other card, i think its the best option, do u think?
2007-11-27 08:46:33 · update #1
simple it depends on interest -- put the most on the one with the most interest and if you have any left it go on the next card!!!
2007-12-01 00:51:01 · answer #1 · answered by Anonymous · 0⤊ 0⤋
It depends almost entirely on the interest rates of each credit card. You should always be trying to pay off the higher interest rate first, because in the end, interest will often times multiply the amount of money you owe.
Consider looking into debt consolidation. Some credit cards are willing to offer you lower interest rates for moving your debt from another card on to their card (it is a business model, that works for them, in the long run). Debt consolidation can do two things: 1) It can make payments easier, 2) It can lower overall interest rate.
But most importantly, to answer your first question, do your best to pay off the card with the higher interest rate.
2007-11-27 10:08:53 · answer #2 · answered by Will P 2 · 0⤊ 0⤋
You would prioritize the card with the higher rate of interest. Also keep in mind that when you pay the entire balance on a card, you do not pay interest on any purchase you made during the previous month. If you leave even $.01 in balance owing, you do. In short, pay off the full balance on the card with the highest rate of interest. Then allocate the residual to the other card.
2007-11-27 10:09:17 · answer #3 · answered by SDD 7 · 0⤊ 0⤋
If you owe $3700 and you will be getting $3500, I'd suggest that you scrape together the remaining $200 and pay them both off at the same time.
2007-11-27 23:47:43 · answer #4 · answered by winters in buffalo 3 · 0⤊ 0⤋
I would go to a bank and get a loan and have them pay off all the credit card debt then use that $3,500 to start repaying the bank loan....oh yeah, and I would cut up those credit cards!
2007-11-27 10:11:26 · answer #5 · answered by Bears Mom 7 · 0⤊ 1⤋
full pay off on one.
afterward, use only that one for current charges and ALWAYS pay it off in full each month.
at least minimum payment to the other one and NEVER use it again for anything until at least 2 months after you pay it off in full.
**
This stops interest charges on current purchases and thus speeds the day of full payout.
2007-11-27 10:11:05 · answer #6 · answered by Spock (rhp) 7 · 1⤊ 0⤋