Author Topic: Debt Payment Question  (Read 827 times)

Mustacheyou

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Debt Payment Question
« on: December 13, 2016, 11:28:19 AM »
If I just did a balance transfer of about 2500 to a card with a 0% interest rate for 15 months does it make sense to stretch out the payments needed to pay off that balance completely over the 15 months and apply extra debt payment money toward other interest bearing loans such as car loans or student loans? Or would it be easier to just burn through the credit card debt as fast as I can and move on to the car loans and student loans after that?

Car Loan is about 10k at 4% interest

Also I'll gladly accept face punches for having that much debt associated with a financed car.

lifeminimalized

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Re: Debt Payment Question
« Reply #1 on: December 13, 2016, 11:30:37 AM »
If you paid a transfer fee you have to think of it as theoretical interest paid. With that said, the shorter time frame you do pay off the balance transfer the higher APR you paid.

Stretching it out the full 15 months is going to thin out that theoretical APR.

Make sense?

marielle

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Re: Debt Payment Question
« Reply #2 on: December 13, 2016, 01:40:07 PM »
It depends on how much you can control yourself. Many people will do a balance transfer which can save them on the interest rate from the previous card, but then don't pay it off on the new card after 15 months. If you think you can pay off your car, then the credit card without splurging and screwing up, then that's the most logical route.

onlykelsey

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Re: Debt Payment Question
« Reply #3 on: December 13, 2016, 01:46:06 PM »
It makes sense to stretch it out so long as you are certain you can get it paid off in time and won't find new reasons to run up credit.

GREAT username!

Mustacheyou

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Re: Debt Payment Question
« Reply #4 on: December 14, 2016, 07:34:02 AM »

Thanks for confirming my thinking on this.

It WILL take some serious self control and WILL be a challenge, but if it were easy I'd have done it by now amirite?