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Credit Car Bill: Should I just pay it off?

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Pay it off in full or you'll be a fool when you add those 14% interest charges and find out it will cost your $5000 in the end.
 
Originally posted by: xospec1alk
hey in the same vein...

i have car payments, about 8900 left....3.9% interest

i have just about 6gs in a savings acct. should i deplete it? its sitting in hsbc online savings earning i think 4.75%
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No. The car loan is secured by tangible collateral (the car) and its interest rate is lower than that of your savings. Hell, 3.9% is pretty close to inflation right now, so that money is almost free. You shouldn't even make extra principal payments IMO.
 
Originally posted by: FrankyJunior
Just get a new credit card that has 0% on balance transfers and transfer it over. I woudl have fone that years ago...
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If you really learned your lesson, don't pay it off. Get a 0% transfer card like franky said.

Remember, Cash is King.
 
No. The car loan is secured by tangible collateral (the car) and its interest rate is lower than that of your savings. Hell, 3.9% is pretty close to inflation right now, so that money is almost free. You shouldn't even make extra principal payments IMO.
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While that part is true, no-one is pointing out that the interest income from the savings is taxable so we need to look at the effective rate of return to compare that to the loan cost.

 
someone correct me if i'm wrong...

but $3000 x 14% = $420/month. so your monthly payment is less than the interest alone?

am i reading something incorrectly here?
 
Originally posted by: Fenixgoon
someone correct me if i'm wrong...

but $3000 x 14% = $420/month. so your monthly payment is less than the interest alone?

am i reading something incorrectly here?
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Monthly interest would be 14%/12 months, or 1.167% per month.
 
Originally posted by: iamwiz82
Originally posted by: Fenixgoon
someone correct me if i'm wrong...

but $3000 x 14% = $420/month. so your monthly payment is less than the interest alone?

am i reading something incorrectly here?
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Monthly interest would be 14%/12 months, or 1.167% per month.
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oh ok.. i thought that interest # was applied per month😱
 
Pay it off, your paying interest, if for some reason you really need that money you were saving you can put it on the credit card and you arn't any worse off than before, but if you don't need the money anytime soon, your not stuck paying interest.
 
I wouldn't empty your savings down to nothing, what happens if you need some money for an emergency like car repairs, medical, etc?
 
Originally posted by: everman
I wouldn't empty your savings down to nothing, what happens if you need some money for an emergency like car repairs, medical, etc?
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(Slaps forhead). He puts those charges on his now empty credit line... If an emergency happens he is no worse off than now. If one doesn't happen he avoids those redicolous interest charges.

Debt is a tool but needs to be managed, this is a clear case where he should get rid of the debt.
 
pay it off, if there is an emergency, you can just charge it and you will still be better off than letting the interest charges continue
 
Originally posted by: rudder
Find a CC with a 6 month 0% interested balance transfer. 14% is crazy.
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Do what he said, or better yet find a CC with a one year 0% BT. Citi Dividend comes to mind.
 
Originally posted by: HardcoreRobot
pay it off, if there is an emergency, you can just charge it and you will still be better off than letting the interest charges continue
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This is also a really good point.

Get rid of that debt!!!
 
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