Car Loan vs Credit Card

[ebaniaga]

Hi everyone, I apologize in advance if this is the wrong board.

I'm about to come into a fairly large sum of money (about $5k).  My dilemma is on deciding where to put said money to its best use.   I have my car which is at about 5% interest currently with a prinicpal left of about $24k.  I have CC debt at about $5500.  Currently the CC is at a 0% interest rate (normally 10.99%).  By the time I get the $5k I will have about 2-3 months of 0% interest left.  I was always told to pay the highest interest rates down first.  In this case that would be the car (currently) but in a few months the CC would take priority.  Should I put the payment toward my car or to my CC or split it?

As per my credit situation: My Discover statement says that as of 3/19 my score is 682 (TU).  I'm not really looking to apply for new cards or what not, but refinancing my car or my student debt would probably be my next move if I were to make one.

Any insight would be great.  Thanks in advance for your help!

[09Lexie]

Pay off the cc debt -two to three months will be here before you know. 

[todd99]

I agree with 09Lexie.

[user5387]

Paying off revolving debt (CC) will typically do more for your scores, because revolving is treated differently than installment for FICO scoring.

[takeshi74]

While you generally do want to pay the higher interested first you also need to consider that, as pointed out above, paying down revolving utilization will have a bigger impact on your credit scoring.  You also need to consider how much interest you'll be paying if you don't pay off the balance on that intro offer.

[tititii]

pay off the credit card. thats ur best option

[MitchL]

In this case I would pay off the CC and roll whatever payment you were making on it as extra on the car payment.

I had a similar decision to make but my car loan and cc balance were about the same.  I decided to pay off the car since the payment was more per month and continued paying on my cc with the extra amont from my now paid off loan.  I was also not concerned with the immediate score since I wouldn't be applying for anything.

[thom02099]

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@takeshi74 wrote:

While you generally do want to pay the higher interested first you also need to consider that, as pointed out above, paying down revolving utilization will have a bigger impact on your credit scoring.  You also need to consider how much interest you'll be paying if you don't pay off the balance on that intro offer.

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+1.  Also, by paying off the credit card debt, the money you would use to pay that debt on a monthly basis could be diverted to increased payments on your vehicle.  You'd be surprised at how quickly you can pay off such a loan just by adding an additional amount to that monthly payment.