Best way to utilize $4k

[Anonymous]

Hi again Asanch...

First, I'd recommend making a new post next time, to get better responses. 

But here goes...

I would still recommend paying down the Nationwide to finish when the 0% expires... So if you haven't yet paid for November, that gives you 3 payments and if you have, then you have two.

If you only have 2 more payments, and you still have $500 a month to put that way, I would pay $1,900 onto it now and then $500 for the next two payments - the goal here is to have it paid off with no interest paid.  By doing this, you would then have (I assume) $1,100 to put on the CITI now, bringing it down to $5,650...if there's anyway you could come up with another $500, that would be best (As it would bring it below 50%). 

However, if you plan on "getting" a car - are you leasing again?  getting a loan?  having a downpayment for a car would be much better than reducing your CC bill...ideally, you would have enough to pay for the car in full but I'm sure that's after you get the CC paid off.

So here are your two options:

1. Pay the Nationwide as above...resulting in a PIF for it at the end of Jan (before the 0% runs off) and have a 55% UTI on the CITI (but it would still be ok, since you have other cards at $0)

2. Pay the CITI down to $5,000 and pay Nationwide down to $1,650...thus both cards would be under 50% UTI

3. Put the money toward a downpayment for your car

One consideration: Nationwide will get interest in Feb...and thus to pay it off before then, you need to either make two or three more payments totaling $1450 or $970 or you will be paying interest on it.  For CITI, you have 6 more months or $1125/month before you pay interst on it... consider which you want to pay off before the interest hits or if you think it'll be better to pay on the car.

Also, stop using the cards...I notice the Nationwide went up (or you paid less on it then suggested)...make sure you have the ability to PIF plus extra on everything.

Finally, one more obscure thought - use the $3k you have to buy a beater car that you can pay for in full and drive that car until after the CC are paid off, then save for another car...within a year you should have a good dp on the newer car you really want and no CC debt to bring down your score.

good luck with your choice

[MattH]

---

Peach8321 wrote:

Hi again Asanch...

First, I'd recommend making a new post next time, to get better responses. 

But here goes...

I would still recommend paying down the Nationwide to finish when the 0% expires... So if you haven't yet paid for November, that gives you 3 payments and if you have, then you have two.

If you only have 2 more payments, and you still have $500 a month to put that way, I would pay $1,900 onto it now and then $500 for the next two payments - the goal here is to have it paid off with no interest paid.  By doing this, you would then have (I assume) $1,100 to put on the CITI now, bringing it down to $5,650...if there's anyway you could come up with another $500, that would be best (As it would bring it below 50%). 

However, if you plan on "getting" a car - are you leasing again?  getting a loan?  having a downpayment for a car would be much better than reducing your CC bill...ideally, you would have enough to pay for the car in full but I'm sure that's after you get the CC paid off.

So here are your two options:

1. Pay the Nationwide as above...resulting in a PIF for it at the end of Jan (before the 0% runs off) and have a 55% UTI on the CITI (but it would still be ok, since you have other cards at $0)

2. Pay the CITI down to $5,000 and pay Nationwide down to $1,650...thus both cards would be under 50% UTI

3. Put the money toward a downpayment for your car

One consideration: Nationwide will get interest in Feb...and thus to pay it off before then, you need to either make two or three more payments totaling $1450 or $970 or you will be paying interest on it.  For CITI, you have 6 more months or $1125/month before you pay interst on it... consider which you want to pay off before the interest hits or if you think it'll be better to pay on the car.

Also, stop using the cards...I notice the Nationwide went up (or you paid less on it then suggested)...make sure you have the ability to PIF plus extra on everything.

Finally, one more obscure thought - use the $3k you have to buy a beater car that you can pay for in full and drive that car until after the CC are paid off, then save for another car...within a year you should have a good dp on the newer car you really want and no CC debt to bring down your score.

good luck with your choice

---

I strongly agree with the suggestion to get an old car and save for a new one under the circumstances as described.  In my experience (right now I'm driving a 2000 Camry I got in 2004, before that I drove a 1994 Corolla I got in 1999, and before that I drove a 1988 Subaru) most cars can give reliable service for well over 10 years if you maintain them.  New or late-model cars are just an expensive luxury for those who can afford them.  Not only does an older car cost less up front, but some other costs such as insurance and taxes will also be lower in proportion to its lower blue book value.  Of course one should take any used car under consideration to a trusted mechanic before making a firm purchase decision.  Also one should run the VIN through carfax to make sure it's not a salvage title.

And if original poster has a car now, in at least 99 percent of cases delaying its replacement would be the best option: even if it will require major mechanical work in the near future it is usually better to keep it unless the cost of needed repairs would be substantially more than its blue book value.  In some cases it can even make economic sense to spend more on fixing up a clunker than it would be worth on the used car market, if the owner would then be able to use if as transportation for a year or so following that repair.

Those of us old enough to remember what cars were like in the 1960s and 1970s will know the above advice did not make sense back then: cars of that era were basically junk by the time they had gone 100K miles so most odometers did not have enough digits to display 100,000 miles.  It was a big deal when somebody rolled over their odometer from 99,999 miles to 00,000 miles.  But I suspect many people still think about cars in ways that reflect the unconsious influence of that era, and of course the marketing departments of car makers spend vast amounts of money persuading people it can be a rational decision to replace a car that can be made reliable by paying a mechanic far less than the price of a replacement car.