fishbjc wrote:Thank you Noah for this post! I'll re-read it again and again until it's all *sunk* into that cavity I call a brain.
I will concede a portion of Dave Ramsey's advice being sound, on the issue of paying off small debts first regardless of the interest. I can at times go along with the first part of that advice, but not the second part entirely.
If one is looking at several debts to be paid off, divide them up into groups. Let's say there's 5 CCs with APRs of 22.4, 18.3, 18.15, 14.9 and 8.9
Group 1: 22.4
Group 2: 18.3 and 18.15
Group 3: 14.9
Group 4: 8.9
Notice how I lumped together 18.3 and 18.15 into one group because it just ain't gonna matter a whole heck of a lot while gets paid. Close enough for horseshoes, hand grenades and CC APRs. Besides you'll waste more time stressing over which end is up.
In my example, PIF Group 1 CCs first because they are hurting the most. When ya get to Group 2, PIF the smaller one first. Can't say that I buy into Ramsey's view entirely, but life's too short to stress over .15% APR. Also, by PIF the smaller one first, there's less chance once a CC is PIF that you can accidentally forget to make the monthly payment.
Ramsey would have one PIF the smallest debt first even if it were 8.9 APR, and that's just plain dumb.
riva wrote:if i have 2 cc's with a debt collection agency shoud i pay both down equally and then close or the smallest first. would anyone know if my credit rating would improve much when payed off ?
Whenever one is paying down CCs and/or trying to get their CC util down, always consider your overall CC util.
If for example the util on one CC is 84%, but one's overall util is 45%, then a couple of BTs could bring everything under 50% util--within a couple of days, then probably one billing cycle of the CCs for the CCCs to report.