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Paying Off Debt



  • Official comment

    Hi Mary Jo,

    I can tell you have given this a lot of thought - and great points!  Of course any time you close an account it can have an impact on the length of your active credit history, so just be aware of that.  I found a nice resource we have that you can model your pay off method through a couple of different strategies.  

    Credit Card Payoff Calculator: Get Your Debt-Free Date

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    I think that you should pay off the credit cards asap. If you don't pay the entire balance of your credit cards when your statement is due, the interest rate is added onto whatever you owe. So if I were you I would pay those off. The accounts should not close out just because you paid off the balances if your account is in good standing. Once you pay off those credit cards and it's reported to the credit bureaus your score will increase. Keep paying your student loan and your car loan as scheduled but definitely attack the credit card debt first! Those interest rates and fees are typically way higher then that of a car loan or student loan. If you come across another big chuck of cash at some point, then I would pay off a portion of the student loan or car loan (which ever has the highest interest rate). I am not an expert but have done my homework on this topic, so I hope this helps. 

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