Car Loan or credit card?

For just about anything you want to get off your chest about credit cards.
2 posts
FutureBillionaire
Centurion Member
Centurion Member
 
Posts: 1589
Joined: Sun Jun 19, 2011 2:37 pm
Location: Down South

Car Loan or credit card?

Postby FutureBillionaire » Wed Jan 25, 2012 5:50 pm

Would you pay off a 5500 dollar car loan or a 9k credit card first? Interest on car is 5 percent and interest on card is 9.5% fixed. Please give your reason as well.
Gas: Discover It, Penfed Platinum Rewards x2, Chase freedom, Citi TYP
Plane tickets: CSP
Groceries: AMEX BCP, Penfed Platinum Rewards,Citi TYP
Clothes: Express, Amex BCP, Discover IT
Amazon: Citi Forward, Cash +
Restaurants: Citi Forward, Chase Freedom, Discover IT, CSP
Hotels and other travel: Discover Escape, CSP
Movies: BofA travel rewards visa signature(fandango), Discover IT, Citi Forward, Freedom
Bars, clubs, tomfoolery: CSP, Citi Forward, Discover IT, Freedom
Balance transfers: Kroger 123 rewards
Bill Pay: Chase Ink Plus, Citi Forward
Everyday spending: Bofa Accelerated cash rewards amex, Discover Escape


sticf
Centurion Member
Centurion Member
 
Posts: 132
Joined: Mon Jul 18, 2011 10:08 pm
Location: Houston

Postby sticf » Wed Jan 25, 2012 7:45 pm

If I could pay one of them off completely at one time (current level to $0) I would pay of the high interest loan first. Paying off the credit card will save you interest (higher balance+higher interest rate should be a good chunk of change) and free up credit for future use (if card is still open).

If you are thinking about accelerated payments (paying the max you can every month until both are paid off). I would look to knock out the lower one first. After it is paid off I would "roll" all the money I am paying out to the other one. This is the approach advocated by Dave Ramsey. It keeps you spending flat while attacking your debt. It also leads to his "feel good effect". You see the bills falling away and it reinforces your commitment to you to "keep it up". Problem is you will spend more on interest. However it is still a plan that is measurable (which really means it can be tracked).

Hope that helps.



Return to “General Credit Card Talk”

Who is online

Users browsing this forum: No registered users and 2 guests