paying off 5-6k in CC debt?

[Young Grasshopper]

i have about 5-6k in credit card debt and am getting tired of making minimum payments on several cards. whats the best way of paying this off? i have the cash to pay it off but would rather not use it for this. last time i got a personal loan from my bank and paid it all off. is there a better way of doing this? i know personal loans dont offer the best interest rate. a coworker of mine recommend doing a balance transfer but im not too sure.

 

[Imp]

Best idea is to use all your savings to pay off your credit. If your credit interest > savings account interest, then you're spending more than you should. But....

I usually get credit card offers or "free checks" in the mail telling me to transfer balances over at <1% interest for a couple months. This usually comes with opening new credit cards, IIRC. Otherwise, a line of credit to pay the cards off, then pay off the line of credit? LoC usually has much better interest rates at 5% or less. If you can snag a promotion or have a bank peddle you one, may get better.

And I totally get why you don't want to use your savings to pay off all your debt at once. I almost opened a lined of credit to pay off my tuition (a few grand) when I had multiple times that available.

 

[Red Squirrel]

6k in CC debt? Pay that ASAP. If anything at least pay it off with a lower interest loan but if you have the cash you are better off just paying it. Makes no sense to hold on to debt when you have the money to pay it.

 

[FleshLight]

Declare bankruptcy

 

[jagec]

Pay the highest interest card off first, young grasshopper.

It's always good to keep a cash reserve, but if you have the savings to pay it off completely, you could pay off all but 2k or so on the lowest interest card and still have a good buffer. That would save you piles of interest.

 

[ElFenix]

a) make larger payments than the minimum
b) balance transfers often have fees that largely negate any interest rate savings
c) personal loans from a bank won't have that much better an interest rate, unless you're at penalty rates for the cards. in which case you might not be able to get a personal loan anyway.

 

[TwiceOver]

i have about 5-6k in credit card debt and am getting tired of making minimum payments on several cards. whats the best way of paying this off? i have the cash to pay it off but would rather not use it for this. last time i got a personal loan from my bank and paid it all off. is there a better way of doing this? i know personal loans dont offer the best interest rate. a coworker of mine recommend doing a balance transfer but im not too sure.

This.

 

[Itchrelief]

I would think prioritizing the cash reserve is stupid when you're paying 15%+ in interest on credit card balances in order to keep the reserve. [edit: assuming you're paying interest on the balances, of course]

The reserve is for emergencies, but the credit cards can be used for the same thing. Pay off the credit cards with your cash, then if you absolutely need to, you can put any emergency spending on the credit cards again.

Serves the same purpose of being able to handle an unforeseen emergency, plus you don't have to be paying usurious interest rates from now until the time an emergency occurs. If you have no emergency, pure profit!

 

[RockinZ28]

Did you get this 5-6k in cash from a free loan to the government or something? Why save cash while racking up CC debt, unless of course your 0 interest promo is just now expiring.

 

[midwestfisherman]

Declare bankruptcy

Retard

 

[Murloc]

I would think prioritizing the cash reserve is stupid when you're paying 15%+ in interest on credit card balances in order to keep the reserve. [edit: assuming you're paying interest on the balances, of course]

The reserve is for emergencies, but the credit cards can be used for the same thing. Pay off the credit cards with your cash, then if you absolutely need to, you can put any emergency spending on the credit cards again.

Serves the same purpose of being able to handle an unforeseen emergency, plus you don't have to be paying usurious interest rates from now until the time an emergency occurs. If you have no emergency, pure profit!

this makes lots of sense.
You accomplish the same thing in the end, whether the emergency manifests itself or not, but you spare lots of money from interests.

Next time, think better and don't get in CC debt. If you save money but rack up debt at the same time, you're just wasting money and not having any more emergency funds than by having no savings and no debt.

 

[waggy]

I would think prioritizing the cash reserve is stupid when you're paying 15%+ in interest on credit card balances in order to keep the reserve. [edit: assuming you're paying interest on the balances, of course]

The reserve is for emergencies, but the credit cards can be used for the same thing. Pay off the credit cards with your cash, then if you absolutely need to, you can put any emergency spending on the credit cards again.

Serves the same purpose of being able to handle an unforeseen emergency, plus you don't have to be paying usurious interest rates from now until the time an emergency occurs. If you have no emergency, pure profit!

yeah seems fucking stupid to me. dur..lets save my cash and continue to pay 12-29% on CC's! durp durp.


unless you are at a 1-2% CC and getting 6% on your cash? pay off the CC's.

 

[Jadow]

pay it off only when you have a couple thousand extra to cover emergencies. Cash is king, and people who advocate paying off all CC debt with no consideration for keeping some cash in surplus are morons who don't know how the real world works!

 

[rommelrommel]

Uh, in case of said emergency he could take a cash advance if completely strapped and needed cash.

 

[Red Squirrel]

Uh, in case of said emergency he could take a cash advance if completely strapped and needed cash.

This. It makes no sense to hold on to debt so you have cash. Pay off the debt, the credit will be available if an emergency happens before you can rebuild the savings fund again.

 

[waggy]

Cash is king, and people who advocate paying off all CC debt with no consideration for keeping some cash in surplus are morons who don't know how the real world works!

exactly and he is wasting cash paying off high interest when he can get out of under it.

pay it off and he now has credit for a emergency.


yeah i know the "real world" people rack up tons of debt. fuck that.

 

[Jumpem]

Direct deposit an amount into savings each week. When that amount equals $5-6k, pay off the card.

 

[Farmer]

Direct deposit an amount into savings each week. When that amount equals $5-6k, pay off the card.

Or just pay it off directly. Theres no need to accrue interest.

 

[heymrdj]

pay it off only when you have a couple thousand extra to cover emergencies. Cash is king, and people who advocate paying off all CC debt with no consideration for keeping some cash in surplus are morons who don't know how the real world works!

People seem to forget that most rent/mortgages ect can't be paid off with CC's, they are cash only to show you have income. You can't even get an MO without cash (either in hand or by debit card). Spending all your liquid on debts in this economy would be insanity!

 

[waggy]

People seem to forget that most rent/mortgages ect can't be paid off with CC's, they are cash only to show you have income. You can't even get an MO without cash (either in hand or by debit card). Spending all your liquid on debts in this economy would be insanity!

I don't think you are understanding.

he has the money is savings. nobody is saying blow every penny you have to pay it off. not to the point he cna't make a rent/mortgage payment or even Get a MO.

that is stupid.

our point is if he has the money in savings pay it off instead of wasting cash on 9-29%. no way he is getting anywhere near that on savings. in the long run he is blowing money.

he is still going to have emergancy funds, he is still going to pay off his mortgage and be able to get a MO

 

[Schfifty Five]

i have about 5-6k in credit card debt and am getting tired of making minimum payments on several cards. whats the best way of paying this off? i have the cash to pay it off but would rather not use it for this. last time i got a personal loan from my bank and paid it all off. is there a better way of doing this? i know personal loans dont offer the best interest rate. a coworker of mine recommend doing a balance transfer but im not too sure.

Do the credit card minimum payments actually amortize the loan balance?

I always feel like the minimum amount due is never large enough to make your principal amount get lower, thus allowing you to eventually pay off your debt.

Since APRs are usually like 15-20%, won't your minimum payments be lower than the interest amount?

FYI, I always pay off my CC's in full, so never had to deal w/ minimum payments.

 

[RaistlinZ]

Pay off all the cards. Start building back up your savings.

 

[jagec]

Do the credit card minimum payments actually amortize the loan balance?

I always feel like the minimum amount due is never large enough to make your principal amount get lower, thus allowing you to eventually pay off your debt.

Since APRs are usually like 15-20%, won't your minimum payments be lower than the interest amount?

They do, but it can take a couple of decades, and can more than double the total amount of money that you pay.

Part of the CARD Act (that I'm sure Visa/MC HATED) is printing on your statement how long it will take and how much interest you're charged if you pay only the minimum, and the same information for paying an additional amount.

 

[Wyndru]

What's the interest rates on the cards? Pay off the ones that are more than your savings interest rate (or even more than the inflation rate) first.

I have a couple of cards with a couple of grand on them at 0-2% so I pay them off last.

 

[Jumpem]

Best idea is to use all your savings to pay off your credit.

This is VERY bad advice. Do not use up your savings. If you become unemployed you will need available cash much more than an empty credit card balance.