[USER]

Please help. I have some money coming my way. Debating if I should pay off my car first. About $15000. Or all my cc debt adding up to like $16,000.

I wish I could pay both debts but only enough to choose one or the other.

Thanks for any input.

[Edna]

Which has higher interest rate- generally the CC debt is more expensive than the car.

Just don’t rack up more Cc debt after you pay it down.

Keep some for a small emergency fund if you don’t have one already.

[Garrett]

I’d pay off the CC debt in full, and use this opportunity to then shift your focus on paying off the car in the future

[Paige]

Pay off the card, cut it up, cancel it, and don’t get another one.

[Rene]

Cc debt but you have to change your spending habits.. cut that card up.

[Diann]

Personally, I would hold out a out $2,000 as an emergency fund…for all those things you might use the credit card for, then put the remaining $13,000 on the CC and pay it off ASAP.

Now you have $2,000 in case you need the A/C worked on or something.
Now, once the CC is paid off, head for the car and make double or triple payments if possible.

You can do this! You’re an adult and no longer swayed by advertising! YOU choose exactly where your money goes!

That’s why that big chunk of money is headed your way! Because you know exactly how to manage money!

Say it over and over again and a thousand times a day if you have to and soon you will realize that those statwments are actually true about you and soon you’ll be a millionaire

[Liz]

DO NOT pay off car. u can trade in the car u can’t trade in cc debt!!! and put that card where the sun doesn’t shine.

if u can’t afford to pay cash for something u don’t need it….or pay card in full each month!!!

good luck!

[kitty]

As an independent insurance agent— please for the love of God don’t put that money into a life insurance policy. It’ll get ate up with fees. Don’t listen to Kristi Brown

-Pay off the cc debt.
-Start an emergency fund. (Put in a high yield savings account to grow while sitting.)

-pay more on your car
-start saving for retirement

[Hayley]

I’d do credit card but I’d call the company and try to negotiate the debt.

If theres financial hardship sometimes they’ll lower the amount if you agree to pay the balance in full.

Not a huge chance this will work but it’s worth a try.

[Sherie]

Pay off whatever has the highest interest rate – if and only if that interest rate is higher than what youd get if you put it in savings.

For example, my car’s interest rate is lower than what I can get if I put my money into a high-yield savings account therefore, I keep a payment and interest rate on my car and put my money in my savings account, because I make more money, keeping it in my savings account then paying off my car.

[Kelly]

Credit card for sure. Then use your income to build up your savings for emergencies and keep making the low-interest car payments but prioritize that after you pay off the credit card debt and have your savings.

[Lauren]

If you are in a job which offers matching payments on a 401k plan I would consider using the money to create room in your budget to increase the 401k up to the max, otherwise pay off the CC then use what were the CC payments to accelerate paying off the car.

[Casi]

I think I’m on the opposite side here mostly. I’d pay off the car first since

1. It’s a smaller debt

2. You chance losing the collateral if you don’t pay it off sooner
I look at it like I need a roof over my head and a car to get me to where I need to go (work to make money if I don’t WFH, to the grocery store for food, to the pharmacy for meds, etc).

Those are my priorities personally.
Credit card debt doesn’t help me with my needs, but my car sure does.

[Marcos]

100 % your credit card debt. Interest on that is 15-30% vs a car loan likely <10%

[Kael]

Pay off whatever you can on CC while leaving a 1 month emergency fund. Pay off whatever is left on CC then Snowball those minimum payments into your car payment.

Then put towards emergency fund to have at least 3-6 months.

[Jackson]

Paying off the credit card debt first is usually the better financial move, especially if the interest rates are high (typically 15–25%).

Even though car loans can be annoying, they often have much lower interest so the credit card debt is likely costing you more over time.

Getting rid of it could free up more monthly cash flow and improve your credit score faster.

[Chad]

There are two methods to paying off debt. One is called the snowball method and the other is called the avalanche method. You can look up both of those terms.

Basically, the snowball method says you pay off your smallest balance first and then take those payment amounts and apply them to the next one.

Avalanche says you pay off your debt with the highest interest rate first and then take that money and pay off smaller ones.

So, depending upon the interest rate of each and how much is owed, that will determine which one you should pay off or down first.

Regardless of which one you pay off first, you also need to change your spending habits to make sure you don’t get yourself into a lot of debt again otherwise paying this off isn’t really going to help you long run.

And I don’t know your situation how you got where you’re at sometimes stuff happens.

One difference between the two kinds of debt is an auto loan if you pay it down your monthly payment still doesn’t change unless you refinance. With a credit card if you pay it down then your monthly payment also goes down.

I would make a guess that if your credit card interest rate is 20-30% and your auto loan is 5%, paying off the credit card first is probably going to be or better option because you’re Not throwing away as much money on interest.

On the other hand if paying one off frees up significantly more monthly cash flow to then turn around and attack the next debt can work too.

And as others have said, once you do get your debt paid off, work on building up an emergency fund. Start with enough to cover your highest deductible whether that’s health or auto insurance etc, and then work up to 3 to 6 months.

This will help give you a buffer in case things happen but you also need to be focused on keeping your debt down. Don’t use credit unless you know you can pay it off by the end of the month before your card charges you interest.

Beyond your initial question, it sounds like you’re still going to have some debt.

So, coming up with a plan on how you’re going to pay off the rest would be a good idea and that might mean looking at how you’re spending money and where you could cut down for a short time to focus on paying off the debt. I wish you good luck in this journey.

[Liz]

save 2k for an emergency fund. and that means not using it instead of card. change now or you’ll have $$$ issues for life!!

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