Here's my game plan. What you think?

[kevbo]

Pay off the higher interest loans first...

 

[kevbo]

No. Pay off higher interest debts.

Will someone sober please corroborate this for me?

 

[kevbo]

Well he didn't say the interest on the car loan, so that is disputable...

 

[Circe Infuria]

Is it possible to transfer some of that debt to a no-interest credit card? I know people who have done that to escape the interest.

If at all possible, apply for one of those "transfer your debt and pay no interest for a year" cards.

That will help to keep that interest from building.

If not, can you consolidate all that debt to a lower interest loan, perhaps at a bank? Credit card interest is really high, and a bank might be able to offer you a lower interest rate.

I also agree.....pay the higher interest bearing debt off first.

 

[gmoney]

Take a look at a consolidation loan. Keep the car loan separate.

 

[Circe Infuria]

I've tried this. Was denied.

The no interest credit card AND a bank consolidation loan or just the credit card?

 

[kevbo]

No no, don't pay the smallest balance... pay the highest interest...

 

[GL]

But that will take me years. Shouldn't I pay off the account with the smallest balance?

i've been told that you should pay off the smallest credit card debts first. and then close that account when done and then tackle the next smallest debt.

if it were me i would continue to pay off my car note as per the payment plan, then pay double the minimum payment on the smallest credit card debt and pay the minimum on the other card(s). once the smallest credit card debt is paid then i would move on to the next smallest.

but that's just me.

 

[kevbo]

Alright

pay bank of America first

then Capital One

then Car loan

 

[kevbo]

if you pay low interest first, you are going to end up paying too much interest on the high interest loans in the end...

 

[sixthson]

Our little cheese doodle from Wisconsin is right. The higher interest loans are accumulating more debt for you on a daily basis. Reduce them first.

Your efforts to work more to live a debt free life are admirable, Piggy. Good work and good luck at it.

 

[StlKj]

Piggy, what is your situation with the credit card people--have you stayed current on payments, not over-charged, etc.? The reason I ask is that if you are in pretty good standing, you could call them and haggle with them to see if you could get a lower interest rate on that card. If they think you might stop using the card altogether because of the higher interest rate, they may knock it down for you. Also, if you can, stay on a fixed rate payment on the credit card, rather than the minimum amount due, which will draw out your payments far longer.

 

[StlKj]

When you called them, did you just talk to the person who answered in customer service? Was he or she not empowered to make such a change?

Here are a few links that might prove helpful:

http://lifehacker.com/software/personal-finance/lower-your-credit-cards-interest-rate-148198.php

http://www.bcsalliance.com/y_reducecreditcardinterest.html

 

[martin6]

if you pay low interest first, you are going to end up paying too much interest on the high interest loans in the end...

This is what I would think, too. Monthly rate of 10% for both payments: 10% of $3,000 is $300 while 10% of $10,000 is $1,000. Right?

Then again, I don't understand banks and all. There is a reason I'm a geography major!

 

[kevbo]

see?

kevbo is a genius, even when he's drunk...

Wow.

I need to get to bed... eh?

 

[valis23]

I think you're doing it right, Piggy.
Dave Ramsey always recommends paying them off smallest to largest, just as you propose, regardless of interest. The reason is that you will see real progress and it keeps your spirit up. The amount of extra interest you'll end up paying is negligible.

Pay minimums on everything but the smallest. Throw everything you can at that smallest debt. Pay it off ASAP, then roll those payments into the next debt. It snowballs.

What's cool is, once you've got them all paid off, you're into the mindset of making those payments. That's when the fun starts. You make sure 15% goes toward retirement and the rest goes toward Piggy.

 

[martin6]

I think you're doing it right, Piggy.
Dave Ramsey always recommends paying them off smallest to largest, just as you propose, regardless of interest. The reason is that you will see real progress and it keeps your spirit up. The amount of extra interest you'll end up paying is negligible.

Pay minimums on everything but the smallest. Throw everything you can at that smallest debt. Pay it off ASAP, then roll those payments into the next debt. It snowballs.

What's cool is, once you've got them all paid off, you're into the mindset of making those payments. That's when the fun starts. You make sure 15% goes toward retirement and the rest goes toward Piggy.

Jeez the things I have to learn by the end of this academic year... Being young was so fun.

 

[sixthson]

Dave Ramsey always recommends paying them off smallest to largest, just as you propose, regardless of interest. The reason is that you will see real progress and it keeps your spirit up. The amount of extra interest you'll end up paying is negligible.

This is not the way I would see it, but then I have often disagreed with so called experts when it comes to finances. I tend to look at this as total debt, rather than 3 separate loans. While it may 'keep your spirits up' to have one less loan staring you in the face, it comes down to mind games rather than a logical approach to the matter. I would, however, agree that it helps to see progress made to keep you inspired, but you can see that by keeping records showing your debt is being reduced on a monthly basis, too.
The amount of extra interest is not negligible when you consider the two larger loans are nearly three times the interest rate of the small one AND the fact he will not be paying of the total debt in one year. It is simple mathematics. You should always look at the long term picture, whether you are investing your money or paying off debt.

Piggy, I think you are right in setting aside your total salary from your second job strictly for paying off your indebtedness.

Ultimately, you have to do what makes you comfortable and if that costs you extra money in interest, that is your choice.

This is just my educated two cents worth at no interest.

 

[Alpha1851]

Way to go Pigster! Getting out of debt isn't easy and it's fantastic that you're trying every way possible to do it. To me, it doesn't seem like you're that far into debt--my school loans are larger than that.

You should check out the book, Young, Fabulous, and Broke , by Suze Orman. Try to get it from the library of course so you aren't spending any unec. funds. She also has a show on MSNBC. I personally think she gives great advice. She also advocates paying off the cc w/ the highest interest rate first.

Are you contributing to your 401k (401b)--if not, you need to start if your employer matches your contributions. That's "free" money.

You're working two jobs now, right? Have you considered finding a new job outside of the educational field? Teaching is a noble profession; but, it would be much more efficient to keep one job than it is to struggle through two jobs and being exhausted at the end of the day.

Good luck!

 

[jhmphx]

Just to second what someone else already said, if you call the credit card companies, they'll negotiate your rate for sure. It's almost expected, so it's not even that big a deal or that much rabble-rousing with them (especially since you can always find someone to take your balance with 0% for awhile).

Don't tell them you're trying to pay it off, though, they like you better if you're thinking of staying around with a balance for a long time.