Question: I’m new to this newsgroup. I started reading the various items hoping to get some ideas on how to pay off my debt faster. Currently, we are a one income family (no kids) but we have a very heavy debt load which includes:
– Mortgage – Large personal loan – 4 major credit cards
We are not putting anything else on our credit cards in the hopes of paying them off faster. Would it be wise to concentrate on the credit cards with the low balance on them or the credit cards with the higher debt? Or should I concentrate on my loan which is about $20,000 but has a lower interest rate than my credit cards?? Any suggestions would be greatly appreciated. Thanks.
Answer: As others have suggested, pay off the highest interest credit cards first. There are a couple of shareware programs on the web that give you a nice estimation of how much to pay each one, how long it will take to pay things off, etc. If you have a PC, I’ve heard Zilch is good. If you have a mac, Debt Wizard. Debt Wizard is hard to find, because it isn’t at the shareware archives, but they have a web page somewhere. If you need it, let me know and I’ll look it up. you should list the loans in order of the interest rate. Work on paying off the highest rate first, while of course still keeping up w/ your minimum payments elsewhere. One thing I did, when I was paying off my $34K in credit card loans, was that I kept switching to different credit card companies to get that 5.9 percent introductory rate. It would usually be good for about 6 months at one company, sometimes more. Then I switch to another “introductory” rate. Do NOT run up these new credit cards however! Assuming your credit cards have the highest interest rate, pay them off first. Probably the house note should be paid off last, because that interest is a tax deduction (assuming you itemize your deductions, as I do).
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