Which order would you pay these?

[User001z]

Well it was nice being at 0% debt for two months, but unfortunately life happens so now I must determine the best way to pay off my new debt. The good news is I am very disciplined with how I use my money so taking down this debt should not cause any unneeded stress. The repairs were actually necessary to get back and forth to work and to pass inspection. I mainly just need a good gameplan on what order to pay these off in. I would think the 0%'s should be tackled first, but I just want to make sure.

Firestone - $1093.79 0% interest if paid off in 6 months (Car repair *Multiple Misfires, power loss, bad head gasket *oil leaking into spark plug cylinders going right thru the tube seals -Unavoidable repair)

Normal APR 34.99%

Precision Auto Tune - $2706.32 0% interest if paid off in 12 months (Car repair *EPS Rack and pinion - Power steering system total failure)

Normal APR 34.99%

Wells Fargo - $7500.00 9.9% interest (Required Home repairs after inspection - Inspector said all had to fixed immediately)

My current gameplan is to pay off the 6 months first, the 12 months next, and then throw everything at the $7500 to kill it within 2 years time.

While they want me to stretch out the $7500 the full 10 years so they make $4500 extra in interest I have no intention of doing so. I expect to wipe out all of this debt in two years time. I am just unsure if this is the recommended game plan.

I already have 75% of the first 1093.79 ready to go on the new scheduled due date.

While this has set my plans back a little bit I know that I will be completely debt free again in two years time so it is a minor inconvenience.

[JoeRockhead]

I'd recommend you do the exact opposite of what you have planned.

Pay off the highest balance, highest interest debt first, then go after the next two 0% balances.

[Vinjints]

A proper recommendation would be dependent on how much you can afford to pay each month. Can't really crunch numbers without it.

Off the top, the interest accruing account needs to be paid down without scarifying the savings from the 0% windows. Even if you pay towards the 7500 for 2-4 months and then use the next 4-2 months to make sure the 6 month is taken care of, that would probably be best. Same for the 12 month card. 

[Varsity_Lu]

How much can you pay toward debt each month?  Certainly that will factor into things.

[User001z]

Right now due to other obligations I plan on throwing about $400 a month at my debt, then using my 3.5K tax return to knock them out within 2 years time. As time goes on I will be able to throw even more at it. What is the recommended game plan. Looking at my amorization table I will be able to do it all within 2 years time. It's just the best order that gets me. I thank you all for your help. In the past you guys have helped me tremendously so all advice is appreciated. I use a (free) vertex 42 debt management system which has an amorization table built in.

https://www.vertex42.com/Calculators/debt-reduction-calculator.html

[FicoMike0]

Do the 0% accounts have a required payment schedule to get the 0%? If so, you want to meet that schedule if possible.

I've seen some of these no interest deals where if you're one day late or dollar short, you owe 25% from the initial loan date. Make sure you get the 0%, I'll bet the interest after the 6 or 12 months is a lot higher than 9.9%.

Once these 0% loans are taken care of, you're on the right track paying wells as fast as possible.

[User001z]

Yes, the firestone card requires the debt be paid in full within 6 months. It's more like the interest is deferred, but 0% if paid within 6 months.

Same for the precision auto card it is 12 months at 0% if paid off in those 12 months. 1 day past that all of the interest from those 12 months hits. Both of those cards have a locked timeframe to pay off all debt to avoid any interest.

The interest if they are one day past 6 or 12 is 34.99% each. Within the 6 or 12 months it's 0%.

This is kind of why I thought attacking the deferred 0% was the best gameplan. If I threw my money at the 9.9% all of the deferred 0% would hit in 6 to 12 months. I still believe that hitting the 0% first since it's deferred is the right track, but I want to hear what you guys have to say. You guys have helped me alot in the past.

I know that it's a determining factor here. I can afford to pay about 400 per month at the moment, but it will be more later on. I plan on throwing my 3.5K tax return at the debt each year too.

[boxmover]

What are the credit limits on each of these cards? That's probably going to factor in somehow. Not necessarily for Fico scoring but so as to not spook creditors. Finances before Fico of course but also don't be maxed out, unintended consequences are no good.

For example of you can't pay down as fast as you want and end up wanting a 0% BT offer in ~10 months to avoid interest on the 12 month deal, or the 9.9% gets min payments only, you're not likely to get it if you're at high util. On one of those 3.

[User001z]

Hi boxmover the credit limits are firestone 3K, precision 3K, and wells fargo 8.5K

$1006 unused on firestone, $293 unused on precision auto, and $1000 unused on wells fargo.

Although I have a 721 fico score I did not try to borrow too much past the repair costs. I could have asked for higher limits, but I chose not to due to the hard inquiries hitting my credit report. I also have 6K more of available credit on my normal general use credit cards which are sitting at 0% utilization on all 3. Keep in mind that I have 75% of the $1093.79 sitting aside ready to be paid this month, so by month two that one will be gone completely. Then I can snowball that payment into the $2706.32 due, before focusing on hitting the $7500.00 in home repairs. I haven't seen the UTI yet since it new credit and unreported on my credit yet. All of this occured last week. I was at 0% debt before this past month.

I am told that my 721 credit score will keep dropping until I get back under 30% utilization again. Even if I make $400-600 more in extra payments each month I am still going to watch my fico score decrease since I have been told scores only rise when below 30% UTI and most lenders want to see you use less than 10% of UTI.

[boxmover]

Knowing your utilization on these 3 accounts is helpful for those who are wizards here at finances and credit  though I'm not one of them I have learned a few things to help you, and I'm sure they'll help you even more!

I wouldn't worry about anything other than that 93.7% util for the first few months, which would also make sense to start knocking down first due to that's the 1 of the 3 that's adding to your debt load every day. It's "maxed" in the eyes of all creditors who do soft pull account reviews, too, and you're risking your other credit lines to be lowered if you let it report as such.

Pay less.interest in the long run, get out of debt faster, and help preserve your credit by focusing on that one first IMO.