Reply
New Member
Posts: 10
Registered: ‎08-06-2009
0

NEED HELP ASAP: Pay off med balance/high APR or high balance with promo ending?

[ Edited ]

Got a slightly better than expected tax refund and we want to use a good chunk of it to pay down debt.

I have a Sears MC with a balance of $2k at 24.99%. This is the card we've been attacking with any extra money. Current minimum payment is $70, have been paying $150. The original plan was to pay this off and throw that money to the next thing.

But, we have 3 promotional balances on a Sears Home Improvement card that will expire before I can pay them off.

$1,158.73 accrued interest $336.38 exp 09/26/13
$2,994.82 accrued interest $452.81 exp 10/26/13
$5,091.89 accrued interest $749.15 exp 10/26/13

(APR goes to 14.40%)

Would it be better to pay off the MC or throw the $2k at the largest promo balance expiring? The minimum for the SHI is $211. I could possibly have one of the balances paid off by the expiration in any case.

 

Thanks for any help!


Starting Score: ???
Current Score: ???
Goal Score: BETTER


Take the FICO Fitness Challenge
Established Member
Posts: 113
Registered: ‎12-04-2012
0

Re: NEED HELP ASAP: Pay off med balance/high APR or high balance with promo ending?

Well, if you ask me, I would recommend that you bury the Sears MC first. The minimum monthly might be low but the high APR means that over time you would bleed more money in general. After that, if your finances permit, go for the largest balance of the SHI and get that out of the way. The two other balances are relatively smaller and the APR is lower that the Sears MC. But thats just my take on the matter.

Moderator
Posts: 27,207
Registered: ‎09-13-2012
0

Re: NEED HELP ASAP: Pay off med balance/high APR or high balance with promo ending?

IMO, when tackling which cards to pay off. Highest APR first. How much will be left over from your refund after you pay off Sears?
Mega Contributor
Posts: 15,442
Registered: ‎04-09-2011
0

Re: NEED HELP ASAP: Pay off med balance/high APR or high balance with promo ending?


Barris wrote:

Well, if you ask me, I would recommend that you bury the Sears MC first. The minimum monthly might be low but the high APR means that over time you would bleed more money in general. After that, if your finances permit, go for the largest balance of the SHI and get that out of the way. The two other balances are relatively smaller and the APR is lower that the Sears MC. But thats just my take on the matter.


I agree with this, pay off the MC first then SD.




Silver Spade Garden Club Member - Last App 12/16/13 - Looking for a clean slate NO INQ's / Diamond Inspired!
Starting Score:
EX (PLUS) 583 EQ FICO 565 TU FICO 590 3/15/2011 / Goal Scores: 720
Current Score: EX FICO (PSECU) 671 (myFICO) N/A / EQ FICO 679 / TU08 FICO 678 / TU VS 706 3/6/2014
Senior Contributor
Posts: 3,197
Registered: ‎01-24-2010
0

Re: NEED HELP ASAP: Pay off med balance/high APR or high balance with promo ending?


ashtysmom wrote:

Got a slightly better than expected tax refund and we want to use a good chunk of it to pay down debt.

I have a Sears MC with a balance of $2k at 24.99%. This is the card we've been attacking with any extra money. Current minimum payment is $70, have been paying $150. The original plan was to pay this off and throw that money to the next thing.

But, we have 3 promotional balances on a Sears Home Improvement card that will expire before I can pay them off.

$1,158.73 accrued interest $336.38 exp 09/26/13
$2,994.82 accrued interest $452.81 exp 10/26/13
$5,091.89 accrued interest $749.15 exp 10/26/13

(APR goes to 14.40%)

Would it be better to pay off the MC or throw the $2k at the largest promo balance expiring? The minimum for the SHI is $211. I could possibly have one of the balances paid off by the expiration in any case.

 

Thanks for any help!


Paying off the MC is very bad advice! 

 

It is only costing you about $40 a month in interest to carry that balance.

 

Everyone of the these Promos that you pay off by the deadline will save you about $500 to $900 roughly.  It is better to run up more debt on another card or BT or whatever you can do to meet the deadline.   It is a big money difference.

Moderator Emeritus
Posts: 12,034
Registered: ‎12-30-2011
0

Re: NEED HELP ASAP: Pay off med balance/high APR or high balance with promo ending?


Wolf3 wrote:

ashtysmom wrote:

Got a slightly better than expected tax refund and we want to use a good chunk of it to pay down debt.

I have a Sears MC with a balance of $2k at 24.99%. This is the card we've been attacking with any extra money. Current minimum payment is $70, have been paying $150. The original plan was to pay this off and throw that money to the next thing.

But, we have 3 promotional balances on a Sears Home Improvement card that will expire before I can pay them off.

$1,158.73 accrued interest $336.38 exp 09/26/13
$2,994.82 accrued interest $452.81 exp 10/26/13
$5,091.89 accrued interest $749.15 exp 10/26/13

(APR goes to 14.40%)

Would it be better to pay off the MC or throw the $2k at the largest promo balance expiring? The minimum for the SHI is $211. I could possibly have one of the balances paid off by the expiration in any case.

 

Thanks for any help!


Paying off the MC is very bad advice! 

 

It is only costing you about $40 a month in interest to carry that balance.

 

Everyone of the these Promos that you pay off by the deadline will save you about $500 to $900 roughly.  It is better to run up more debt on another card or BT or whatever you can do to meet the deadline.   It is a big money difference.


I'm admittedly not up on promo expiration, but I thought they simply started accuring interest from the date the promo expires? 

 

Or is their a penalty clause where pay an aggregate interest charge from the opening or some other date for anything not paid off?

 

In the first case, highest APR wins; in the second one if we're talking penalty phase, Wolf's absolutely right.

Starting Score: EQ 04 561, TU 98 567, EX 98 599 (12/30/11)
Current Score: EQ 04 700, TU 04 731, EX 98 725 (05/24/15)
Goal Score: 700 on EQ 04 (01/01/16)


Take the myFICO Fitness Challenge
Epic Contributor
Posts: 25,246
Registered: ‎10-23-2007
0

Re: NEED HELP ASAP: Pay off med balance/high APR or high balance with promo ending?


Wolf3 wrote:

ashtysmom wrote:

Got a slightly better than expected tax refund and we want to use a good chunk of it to pay down debt.

I have a Sears MC with a balance of $2k at 24.99%. This is the card we've been attacking with any extra money. Current minimum payment is $70, have been paying $150. The original plan was to pay this off and throw that money to the next thing.

But, we have 3 promotional balances on a Sears Home Improvement card that will expire before I can pay them off.

$1,158.73 accrued interest $336.38 exp 09/26/13
$2,994.82 accrued interest $452.81 exp 10/26/13
$5,091.89 accrued interest $749.15 exp 10/26/13

(APR goes to 14.40%)

Would it be better to pay off the MC or throw the $2k at the largest promo balance expiring? The minimum for the SHI is $211. I could possibly have one of the balances paid off by the expiration in any case.

 

Thanks for any help!


Paying off the MC is very bad advice! 

 

It is only costing you about $40 a month in interest to carry that balance.

 

Everyone of the these Promos that you pay off by the deadline will save you about $500 to $900 roughly.  It is better to run up more debt on another card or BT or whatever you can do to meet the deadline.   It is a big money difference.


RIGHT!!!

 

Your interest about to come down on even just the first Sears promo would be over 1 year of interest on the MC... although a 24.99% stinks to look at and 14% ongoing would be WAY better on Sears, clearly this interest has been promo for a bit.  Pay PROMO FIRST! TRY TRY TRY to get at least 2 of them.

 

You have over $9k+ on a Sears card backed by citi and is the sears MC the citi version (sounds like it at $2k, or the Household Bank Version?, You can't get a card to transfer these that can't be paid off with taxes with say Chase, Barclay, any of them offering 18 months to transfer these expiriing promo's so you pay a 3% transfer instead of a deferred interest of over $1600!!!

 

Fico Scores: EQ- 670., TU 710 Sync, EX 728 SoFi(05/04/15)
I'm just trying to catch up to RON1
95 Cards and Counting Smiley Tongue
Frequent Contributor
Posts: 498
Registered: ‎01-29-2009
0

Re: NEED HELP ASAP: Pay off med balance/high APR or high balance with promo ending?


Revelate wrote:

Wolf3 wrote:

ashtysmom wrote:

Got a slightly better than expected tax refund and we want to use a good chunk of it to pay down debt.

I have a Sears MC with a balance of $2k at 24.99%. This is the card we've been attacking with any extra money. Current minimum payment is $70, have been paying $150. The original plan was to pay this off and throw that money to the next thing.

But, we have 3 promotional balances on a Sears Home Improvement card that will expire before I can pay them off.

$1,158.73 accrued interest $336.38 exp 09/26/13
$2,994.82 accrued interest $452.81 exp 10/26/13
$5,091.89 accrued interest $749.15 exp 10/26/13

(APR goes to 14.40%)

Would it be better to pay off the MC or throw the $2k at the largest promo balance expiring? The minimum for the SHI is $211. I could possibly have one of the balances paid off by the expiration in any case.

 

Thanks for any help!


Paying off the MC is very bad advice! 

 

It is only costing you about $40 a month in interest to carry that balance.

 

Everyone of the these Promos that you pay off by the deadline will save you about $500 to $900 roughly.  It is better to run up more debt on another card or BT or whatever you can do to meet the deadline.   It is a big money difference.


I'm admittedly not up on promo expiration, but I thought they simply started accuring interest from the date the promo expires? 

 

Or is their a penalty clause where pay an aggregate interest charge from the opening or some other date for anything not paid off?

 

In the first case, highest APR wins; in the second one if we're talking penalty phase, Wolf's absolutely right.


The interest accrues from date of purchase but not applied unless its not paid off by the time the promo ends.  I would get rid of the promo's first .. You have currently 1538.34 deferred interest hanging out there. Which i am sure by the time it hits the end of the promo will be closer to the 2k mark.  So if you pay off the first card.. The other three will just put you right back in the same spot as you were at with  2k more debt.   I would use the whole tax return to pay down as much as the three cards you can. Then look for another card to transfer the rest of the debt to.  I would also go to your HR department and adjust your deduction to stop giving the IRS an interest free loan and that way you will have more income immediately to add to paying off these debts.

 

 


Starting Score: 680
Current Score: 761 From 12/11/2013
Goal Score: 800


Senior Contributor
Posts: 3,197
Registered: ‎01-24-2010
0

Re: NEED HELP ASAP: Pay off med balance/high APR or high balance with promo ending?


Woolfman wrote:

Revelate wrote:

Wolf3 wrote:

ashtysmom wrote:

Got a slightly better than expected tax refund and we want to use a good chunk of it to pay down debt.

I have a Sears MC with a balance of $2k at 24.99%. This is the card we've been attacking with any extra money. Current minimum payment is $70, have been paying $150. The original plan was to pay this off and throw that money to the next thing.

But, we have 3 promotional balances on a Sears Home Improvement card that will expire before I can pay them off.

$1,158.73 accrued interest $336.38 exp 09/26/13
$2,994.82 accrued interest $452.81 exp 10/26/13
$5,091.89 accrued interest $749.15 exp 10/26/13

(APR goes to 14.40%)

Would it be better to pay off the MC or throw the $2k at the largest promo balance expiring? The minimum for the SHI is $211. I could possibly have one of the balances paid off by the expiration in any case.

 

Thanks for any help!


Paying off the MC is very bad advice! 

 

It is only costing you about $40 a month in interest to carry that balance.

 

Everyone of the these Promos that you pay off by the deadline will save you about $500 to $900 roughly.  It is better to run up more debt on another card or BT or whatever you can do to meet the deadline.   It is a big money difference.


I'm admittedly not up on promo expiration, but I thought they simply started accuring interest from the date the promo expires? 

 

Or is their a penalty clause where pay an aggregate interest charge from the opening or some other date for anything not paid off?

 

In the first case, highest APR wins; in the second one if we're talking penalty phase, Wolf's absolutely right.


The interest accrues from date of purchase but not applied unless its not paid off by the time the promo ends.  I would get rid of the promo's first .. You have currently 1538.34 deferred interest hanging out there. Which i am sure by the time it hits the end of the promo will be closer to the 2k mark.  So if you pay off the first card.. The other three will just put you right back in the same spot as you were at with  2k more debt.   I would use the whole tax return to pay down as much as the three cards you can. Then look for another card to transfer the rest of the debt to.  I would also go to your HR department and adjust your deduction to stop giving the IRS an interest free loan and that way you will have more income immediately to add to paying off these debts.

 

 


If you are normally getting a tax refund.   You can increase your deductions to get more money in your paycheck now to pay these things.   I adjust mine throughout the year, to try to hit the owe just a little when tax time comes.  

Whatever tax flow tricks you have, now is the time to use them.

 

Moderator
Posts: 27,207
Registered: ‎09-13-2012
0

Re: NEED HELP ASAP: Pay off med balance/high APR or high balance with promo ending?

OP, how much money are we talking about? $2k? Or more?
Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
† Credit cards for FICO Score ranges: The score ranges are guidelines based on actual applicant approvals and having a FICO Score in a particular range does not guarantee you will be approved for credit cards recommended in that range.

Copyright ©2001-2015 Fair Isaac Corporation. All rights reserved.   | Terms of Use | Privacy Policy | Sitemap

IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.