12-29-2012 02:19 PM
We have 2 cars - one paid off and one that we still owe about $13k on @ 1.9% interest. The one that was paid off was just totalled and the insurance has cut us a check for $10k. We have to purchase a new car. The interest rate for the new car will be about 4%. I have some credit card debt that is roughly 21% interest. My question is should I take the car settlement payment of $10k and pay down one of the two cars or should I pay the $10k car money towards the high interest credit card debt?
12-29-2012 04:02 PM
My opinion is to get the car at 4% and pay down the credit card -- it iscosting you the most money. Are you planning on applying for financing on any other major purchases any time soon, besides, of course, the car at 4%?
12-29-2012 04:04 PM
No - but then again didn't plan on this major purchase either. I have no negative items on my credit - just high balances. Otherwise I would be able to get a lower rate on the new vehicle.
12-29-2012 04:48 PM
I would agree with idea use the money from insurance company to pay down the credit card debit. I think it would save you the most money in the long run.
12-29-2012 05:55 PM
If you can get by without the second vehicle, it would make sense to put some monies down on the highest cc, and if you do not have an emergency fund, put a grand or so away for emergencies.
12-30-2012 10:14 PM
Definitely pay off the credit card.
How much CC debt will that leave you with? If alot, maybe try a less expensive car and pay the difference on the CC debt, just a budgeting suggestion. Good luck!
01-05-2013 05:53 AM
Forums posts are not provided or commissioned by FICO. Forums posts have not been reviewed, approved or otherwise endorsed by FICO. It is not FICO's responsibility to ensure all posts and/or questions are answered.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.
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.