topic Re: Car loan or credit card? in Credit Cards

Car loan or credit card?

Anonymous — Thu, 31 May 2012 17:48:58 GMT

I have 22 payments left on my car loan $9600 balance @6.9% and $2900 balance on a 0% visa(till July 2013).

My question is I would like to pay one of them off asap then the other asap. Just not sure which one to go for.

The money: I can do my regular car payment plus $250 each month and $100 to the visa, OR regular car payment and $350 to the CC.

I would really like to have my car free and clear but just not sure if thats the best move or clearing the CC off the table is.

Any thoughts?

Re: Car loan or credit card?

AZHeather — Thu, 31 May 2012 17:50:48 GMT

If you are looking to improve your credit score, then you should pay the cc first.

Re: Car loan or credit card?

Anonymous — Thu, 31 May 2012 17:52:31 GMT

@Anonymous wrote:
I have 22 payments left on my car loan $9600 balance @6.9% and $2900 balance on a 0% visa(till July 2013).

My question is I would like to pay one of them off asap then the other asap. Just not sure which one to go for.

The money: I can do my regular car payment plus $250 each month and $100 to the visa, OR regular car payment and $350 to the CC.

I would really like to have my car free and clear but just not sure if thats the best move or clearing the CC off the table is.

Any thoughts?

IMHO, I would do a 0%BT for 12-15 months to pay off the remaining $9600 interest free. Chase is offering 15 months BT with no transfer fee. But if you're more concerned about your credit scores taking a temporary hit than saving money, a BT isn't a good idea.

Re: Car loan or credit card?

pizzadude — Thu, 31 May 2012 17:53:53 GMT

@Anonymous wrote:
I have 22 payments left on my car loan $9600 balance @6.9% and $2900 balance on a 0% visa(till July 2013).

My question is I would like to pay one of them off asap then the other asap. Just not sure which one to go for.

The money: I can do my regular car payment plus $250 each month and $100 to the visa, OR regular car payment and $350 to the CC.

I would really like to have my car free and clear but just not sure if thats the best move or clearing the CC off the table is.

Any thoughts?

From a debt perspective, FICO weighs revolving utilization much heavier than installment utilization, so your FICO score would probably benefit more from paying down the credit card.

If you aren't too worried about trying to help your FICO score right now then it would make sense to pay the car loan since your CC is at 0%.

Re: Car loan or credit card?

Anonymous — Thu, 31 May 2012 18:05:27 GMT

Thanks!

Not concerned about score since I'm in the 800 club, just want to make the smartest move to finish 'cleaning house' of my debt.

Re: Car loan or credit card?

pizzadude — Thu, 31 May 2012 18:12:29 GMT

@Anonymous wrote:
Thanks!

Not concerned about score since I'm in the 800 club, just want to make the smartest move to finish 'cleaning house' of my debt.

In that case then definately pay down the auto loan, don't worry about the CC.

Re: Car loan or credit card?

ADARPegasus — Thu, 31 May 2012 18:21:31 GMT

You should pay your auto loan first because what i was told by the bank and some cc companies is that Auto Loans and Loans in general effect your credit the most because there fixed rate/ fixed payment items and they make you seem more risky to creditors because you have to pay that amount every month no matter what because i have a auto loan on me that i just paid off helps a awful lot so i would say pay the Auto Loan especially if your trying to apply for something else very soon.

Re: Car loan or credit card?

Anonymous — Thu, 31 May 2012 20:32:07 GMT

@Anonymous wrote:
I have 22 payments left on my car loan $9600 balance @6.9% and $2900 balance on a 0% visa(till July 2013).

My question is I would like to pay one of them off asap then the other asap. Just not sure which one to go for.

The money: I can do my regular car payment plus $250 each month and $100 to the visa, OR regular car payment and $350 to the CC.

I would really like to have my car free and clear but just not sure if thats the best move or clearing the CC off the table is.

Any thoughts?

Pay the minimum payment on Visa and rest on the car payment for several months. Then about December 2012 or so, switch all to VISA so that you have your Visa paid off by July 2013. You don't want to start paying high interest rates on the Visa.