Delima

[Breezy]

We have a couple of bills who doesn't right lol
Any way I am torn as to which one to pay.
With the little money that we got from the house I can either pay of dhs car low interest rate (250 monthly) a bill that is interest free (480 monthly) or a credit card (highest interest even though they are extremely low for CCs).
Which would you pay and why?
I really want to pay off the 480 one but it sucks that it is intereste free. If I pay off the CC I am afraid we will just rack it up again (can't cut it up cause with the pay getting screwed up every payday and dh leaving shortly with no idea as to when he will be back gotta have a back up). I hate dhs car and would like to pay it off too but the interest is so low it may not be worth it, except I wouldn't have to write a check every month lol.

So what would you do? I need to do it before we spend it on something we really shouldn't lol.

[Truckman]

Always pay off the one that costs you the most first...That frees up monthly money to pay off the next in line...Oh, and don't cut up the credit card just don't use it...Ben

[Breezy]

Thanks Ben
That is what I was thinking too.

[andyz]

Ditto Truckman's advice. By paying the higher rate debt, you essentially earn that much each month by not having to pay it now. Paying that is better than you'd get on your retirement account. And as noted, if you keep the same monthly outflow, you'll pay off the car sooner, then the interest free debt. Actually, I'd bank the extra each month and pay the interest free debt according to schedule, unless you just want to be debt free.

[sldi]

An interest free loan is using someone else money for nothing. I never pay them off early.

[adirty1]

pay the one that cost the most now. However. your interest free loan normally starts to collect interest at a given time and normally the rates are outrageous. IE 18-21 percent. I learned my lesson with interest free loans. pay them off in the time given if not be ready to get hosed. some interest free loans will charge interest at 18-21 percent of the total amount for the loan even if you only have a part of note outstanding when it comes due. that bill alone could end up costing much more in the long run.

If you know for sure that you can pay the interest free loan off in time than I would pay the CC now. If I was at all worried that I could not pay the interest free off in time I would pay it now.

[Breezy]

The interest free is good for the full 40 months. So unless I am late on payments it will be paid off on time.
The credit cards I can actually get 1.9 and 0% by moving them around. The highest would then be 6% man it wouldn't be so hard if we had rates of like 15-20% lol
Thanks again all.

[abril1127]

I would pay off the $480 a month one. Then set up a savings account where $200 automatically goes into it and the other $280 goes to the CC. Then hopefully you will have money in Saving to cover incidentals when the Navy just so casually forgets to pay you or something (been there multiple times).....This way you never miss the money you already had dedicated.
It's always easier to plan than to actually live!

[Breezy]

good idea april