What should I pay off first?

Asked by ibadt (189

) February 18th, 2009

I have decided that even though I haven’t really suffered from the current economic situation, I am going to try really hard to get all of my debt paid off. I would like to know if it is better to pay off my credit cards or my car first. I owe roughly the same amount for all of my credit cards as I do for the car (around $4,000). I do have student loans, but that amount is significantly larger and it’s going to take me a long time them off so I am not worried about this debt. I’m currently using the snowball method to pay the credit cards and it has worked incredibly well for me, but I just realized that my car probably isn’t worth that much more that I owe on it.

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9 Answers

The general rule-of-thumb is to pay of the debt with the highest interest first.

I’m considering refinancing my car loan.

hearkat (22922

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If the credit cards have the highest interest rate, then pay them first. You might look into a low or no credit card to combine them all on if you thought you could pay them off in that time period, usually a year.

chyna (51599

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Pay off the credit card with the highest interest rate. Go to consumerist.com, they have a ton of resources for getting out of debt. Good luck!

Mamradpivo (9665

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edit: “low or no interest rate”.

chyna (51599

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actually I dunno, if you pay off your car you won’t be required to have full coverage by your insurance company. For some people that is a big difference. So see how much you would save on your insurance first by paying off your car then figure it out from there.

LKidKyle1985 (6599

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