Paying Down CC...

[Anonymous]

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@NRB525 wrote:

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@Anonymous wrote:
If I was a comenity shareholder, id agree with the above.

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The open balance numbers involved are too small to worry about what the specific interest rate might be. The CapOne rates are probably pretty close to the VS rates anyway, and you can't use VS at the grocery store or gas station.

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This is true, The CapOne may be 22.99 while the comenity cards are likely 26.99 or around there.

Even my wife's old VS card (Closed due to inactivity) from back in '06 was 21.99%

[Anonymous]

Thank you all for the responses!

The CapOne with the lowest balance is interest free right now and I think your right on the money with the interest rates of the Commenity cards.

I love the idea of paying them off one at a time, having zero balances is definetly a motivator, but I can see how it would cost me more in the long run.

[VirtualCuriosity]

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@Anonymous wrote:

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@NRB525 wrote:

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@Anonymous wrote:
If I was a comenity shareholder, id agree with the above.

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The open balance numbers involved are too small to worry about what the specific interest rate might be. The CapOne rates are probably pretty close to the VS rates anyway, and you can't use VS at the grocery store or gas station.

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This is true, The CapOne may be 22.99 while the comenity cards are likely 26.99 or around there.

Even my wife's old VS card (Closed due to inactivity) from back in '06 was 21.99%

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I am also in the camp of paying the smallest balance first and work the way up with avengence.  The goal is to pay off the cards and if there are additional behavioral issues, financially speaking, this way can assist in keeping up motivation.  I think we get caught up in the math too much when it comes to interest rates, once someone is buried in debt (not saying the OP is buried in debt).  A wise man once said, IF we were that worried about the math (regarding interest rates), we would probably not be in this situation to begin with.

[Anonymous]

I think APRs in this particular case should make little difference. Balances are just too small. 

For a $500 balance, a difference between 21% APR and 26% APR is $25. Much better to simply pay them off in whatever way motivates you to do this faster. 

[Chris679]

I agree that in this case there is not much interest to be saved. For someone much deeper in debt though I would argue that by paying off the higher interest rates first the motivation should be starting to make the correct financial decisions rather than letting your emotions control your finances.

[disdreamin]

I hear what you are saying, Chris, and it definitely makes better financial sense. However, if someone starts to really lean on their budget to pay off debt (to the point of really feeling deprived...no entertainment, rice and beans for meals) the satisfaction of paying off smaller debts completely may help keep them motivated where attempting to slog through a high amount immediately might feel insurmountable.

Frankly, many of the things people do with money and credit seem to be based more on emotions than finances, IMO. I'm not saying it is a good thing, I'm just saying it happens (again, in my opinion).

[Anonymous]

Emotion has no place in finances. Business, Always business.

I've said my piece, OP. Pay it down however you want as long as it gets done, Good luck.

[disdreamin]

I know this is getting OT, but I wanted to say that I agree with Nixon - what he described is definitely the way it should be!  Finances are about doing the math and making the wisest decision based on that data.

Sadly, though, I've also been witness to friends so deep in CC debt they couldn't see daylight who, when things were that bad, let it become very emotional for them.  Too often I've observed that the debt itself can stem from a "feel good" high...I have a close friend who I've watched go down that same path many, many times.  Until that person finds another "high" they're going to keep following the same path back to high debt load.  While it would be better if that person could make it all about dollars and cents (or sense), if the "high" of paying off credit cards one-by-one replaces the high of racking up debt, I'll take it as a victory.  

OP, please don't think anything I've said above is directed at you - your debt is very managable, and it sounds like you are ready to tackle it head-on.  I'm sure you will have it paid off in no time.  As Nixon said, do whatever works for you.  But he's right - financially, the best thing would be to look at the numbers and leave emotions out of it.  Sadly, though, that approach does not work for everyone.

[slund5499]

I have seen great success in the snowball plan from both observational and personal experience. Basically make the minimum payments on all your cards except for the small balance due. Focus on paying that account off. Then take that payment and apply to the next lowest balance card (while maintaining your minimum payment balance on all other cards).

The only thing different I did was I segregated two plans.....one for staore cards and the other for bankcards. However, everyone's situation is different as the APR, rewards and income play a major role in the decision making of how to approach a payoff plan.

Just my two cents worth.

[slund5499]

I agree and disagree. When the statement cuts, that is the balance reporting to the bureaus.

You can save intrest by PIF each month, but balances report shortly after the statement cuts. At least on all 10 of my accounts.

I get an email statement and the balance of my $500 card is $175 and the due date is 15 days from the statement cut date. I PIF to get the Util and save on intrest rate and the statement balance of $175 reports to the bureaus which shows a 35% Util rate. it seems like the reporting to the bureaus depends on when the company's batch accounts cycle through. For me....usually the reporting is TU then EX and then EQ (and this happens over a week time frame).

Can't explain it.....but that seems to be the pattern.