I have about $20,000 in Credit Card Debt and $40,000 or so in Student Loans. I also have a Car Loan Currently, and it has about $25,000 left on it. My credit score is currently in the mid 600's, and although I have a lot of debt, I am always on time with my payments.
With that being said, I was given about $20,000 and I am trying to figure out where I should put that money. I think I'd like to pay off the credit card debt, as several of those cards have high fees. If I do that, I am concerned one of the accounts may be closed, as I've had this happen in the past when I paid off a card. I'm wondering if I should leave a very small balance to keep the cards active? Ideally I'm looking to improve my credit score with whatever I do, and we plan to use the money this frees up to power through the Car Loan, and then the Student Loans. I'm just not sure if paying the credit cards off in a lump sum is a bad idea. Can someone please give me some guidance?
For what it's worth, we own a home, and have a decent amount of equity in it. We are trying to get our finances in order, get rid of the debt, and start saving for a slightly larger home because we are going to be outgrowing this one. So, I'm just trying to get us moving in the right direction. Thank you!
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