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What would you do?

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idkam posted 4/11/2014 10:06 AM

In an effort to get my ducks in a row...I have one cc that i owe $799 (limit $1400) and i have $700 in my savings acct... Is it smart to take out abt $550 and pay the card down then i only have 2 months to pay it off instead of making small payments and taking longer to pay it off??

What say you??

kiki1 posted 4/11/2014 10:48 AM

Pay it off sooner and it will cost you less in interest. Plus get you out of the situation your in faster.

Just a thought,,,,,,,,

idkam posted 4/11/2014 10:51 AM

Thanks k this is my thought process also...

karmahappens posted 4/11/2014 11:01 AM

I agree with paying it down fast, but not at the expense of your only safety net.

Leaving your savings at only 150$ puts you in a tight spot.

I never take from savings except for emergency. Usually I can find some other way to pay something that has come up, allowing the savings to be safe.

Do you have a budget with spending money ? Out to dinner, the movies?

I would opt to pull back on spending and pay as much as I could afford without hitting my savings.

You may pay a bit more interest, but if you cut corners as much as possible you would be surprised at how much you find.

LisaP posted 4/11/2014 11:19 AM

You're interest rate on the credit card is most likely an outrageous amount and the interest you are earning on the savings account is almost nothing. You are losing money every month.

Because the time frame is so short (a few months) and the amount is so small, I would pay the credit card down. Once paid, begin building your savings again.

Should an emergency arise, your safety net is the credit available on the credit card until you build up that savings account again. Most likely you won't need it...fingers crossed, but it's there just in case.

GabyBaby posted 4/11/2014 11:19 AM

You need to do a life triage of sorts.
Tend what's openly bleeding FIRST, then tend to the smaller cuts and scrapes.

Given the situation you're in with your SO, my opinion is that the open gaping wound you need to tend to first is getting out of that household.
The credit card debt is a scrape you can patch up later.

idkam posted 4/11/2014 11:31 AM

Lisa thanks for your response....that is a good plan and is on the lines of what i was thinking.....

Gaby thanks for your response... I really want to alleviate as much overhead as i can because i know i will need a bed, tv, furniture so having a clear cc balance is a good thing....

Karma thanks for your response...i could build my savings up each pay period... Right mow im working overtime so that extra money can go to my savings. Acct....I also have a 401k if im in desperate need of money.... I do not want to touch it but if i have to i will...

TrustedHer posted 4/11/2014 16:05 PM

Google "Dave Ramsey".

Basically, you need a safety net cushion, and to pay off your short term debt as quickly as possible beyond that, before saving and investing.

I seem to recall he likes your safety net to be about $1000 in savings. In my mind, having the equivalent available in credit is almost as good, so I'd pay off the card.

Except for some things, you do need cash. Some towing, impound lots, bail bondsmen...

So I'd build up that $1000 as fast as possible, and not breathe easy until then.

Then you go after your long-term debt, tooth and nail.

There's a lot more to it, of course, that's why I said to google.

idkam posted 4/11/2014 18:43 PM

Trusted thanks for your response ...yes that makes sense to me...

Amazonia posted 4/11/2014 20:24 PM

Does your current income cover what your expenses will be once you cut ties with the current bf? Rent and all that? You should have at very least one month in savings, especially right now when you're trying to escape this relationship. Otherwise it's just going to end up going back on the cc, and you won't have any flexible cash for stuff where you can't use the card.

Iamhappytoday posted 4/12/2014 00:22 AM

Also, when was the last time you called your cc company and requested a change on your interest rate? After calling, if they don't negotiate, shop around.

Sounds like something you can only do with a stellar credit rating? Not true! It does take time and effort,and maybe you'll find a rate that's better that will require paperwork and a month to do the transfer, but I encourage you to call around and explore as many options as possible.

Years ago I had a terrible credit rating and some nagging debt, but by calling and making requests and doing some research I was able to make a touchy situation more manageable.

I can tell you that many years later, it was worth it.

Best of luck to you!

[This message edited by Iamhappytoday at 12:23 AM, April 12th (Saturday)]

idkam posted 4/12/2014 07:49 AM

Ama & iam thanks for your responses...

The money i have in my savings is what i was going to use to pay the cc down.(besides that i only have my 401k). I was thinking of paying abt $560 on it then pay it out in another month.... I'm working overtime so that money will go back into my savings acct....i will def continue putting monies in my sav acct until i reach $1000...

Iam actually the cc was paid off bc we were trying to get the house.. I just put $799 on it when i purchased he wadher in March....i will chk on monday about the lower interest rate...

I checked with the CU about refinance loan... Is that a smart thing to do??...Right now SO pays my car note, the car is in both our names....

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