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Alright, so I got a little more back on my income tax than I expected because of the American Opportunity Credit.. I got back about $2,400. I figured I'll use this to pay off some debt and lower my monthly expenses.
Here's what I'm dealing with:
Capital One - $414 balance / $500 limit . ~19% interest
Citi - $2,971 balance / $5,000 limit ~ 14% interest
Personal loan/car - $1,400 balance ~ 13%
My plan is to pay the Capital One down to a low ($20 - $25) balance.
The Citi down to a ~$900 balance, and wean that down to ~$200 balance over the next few months.
Pay off the car loan completely, and in doing so also be able to downgrade my insurance from full coverage ($120 a month) to just liability (~$44 a month). Since my insurance plan expires in 2 months, I would have to pay off my loan fully in that time to make the change to liability. Otherwise I would just work on the loan in bigger chunks.
Does this seem like a good plan? I will have to dip into my checking a bit to pull it off but it's do-able.
It works, but out of curiosity what's the rationale for leaving any balance at all on the Cap 1 card?
If it were me, I would definitely pay the Cap1 off completely.
I'd pay off both Capital One and your auto loan. Then put the money free'd up from your car payment and insurance towards paying off Citi ASAP.
@Corvidae wrote:I'd pay off both Capital One and your auto loan. Then put the money free'd up from your car payment and insurance towards paying off Citi ASAP.
+1