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Paying off debt



  • Official comment

    Hi Cece,

    That is such a great question!  As you mentioned, there are a couple of different "plans of attack" on how to pay your debt off most cost-efficiently AND in the best way to protect your credit.  Here's a GREAT resource that will allow you to do some trial calculations, plus define both 'Snowball' and 'Debt Avalanche' methods, among other factors:

    Good luck!

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    there are 2 schools of thought. Save the most money(payoff highest interest) or payoff fastest(payoff lowest balance)
    My advice is to star with the lowest balance Credit card and work your way up.

    Card $3800 -pay the maximum you can each month to knock it down.

    Card $9000 -pay the minimum payment on Autopay

    Car -pay the due car payment. 

    once card 3800 is paid off, add that maximum monthly payment plus the minimum to card 9000 and pay it down.  Once you are out of debt apply both card payments to the car (snowball) . this allows you to make the most amount of productivity in the shortest amount of time. if you started with the card9000 you would be making 2 card payments and pay interest much longer. 

    If you find yourself in a position where you can apply for a new card with a good balance transfer offer (18 months or so) take the offer and divide your balance due by the 0% term and pay it all off before the interest accrues.  for reference you currently owe 12,800. divide by 18 you would pay that off interest free in 18 months with $711 per month. I know that sounds more like mortgage money, but it should reflect to you how the credit card debt has done you terribly wrong.

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