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marcusandila
Joined: 27 Oct 2009
marcusandila's page
Posts: 148
3025 Magic Points
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Subject: question about paying debts back
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Fri Nov 20, 2009 5:49 pm
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So, I've been thinking about my options on repaying my debt. I'm on the road [very long road] to becoming debt-free [besides mortgages] & I was wondering what you all thought about this idea that I had. I'm sure other people thought about it too, but I personally have been really thinking about it here lately.
First of all, I always read "NEVER pay JUST the minimum payment unless you REALLY can't afford to pay more". This is to pay the interest down. Right ??
But then I thought, what if I QUIT paying MORE than the minimum & just set the money I WOULD pay extra to the side in a savings account or whatever. THEN at the end of the year, pay a big payment onto it [plus the minimum payments all year round].
Financially, do you think this is a better option?! Would the "big chunk" of money pay more on the principal than "more than the minimum payments" yearly? In which case, the debt would be repayed faster??? |
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sdchargers_63
Joined: 13 Aug 2007
sdchargers_63's page
Posts: 1498
111 Magic Points
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Subject: debt
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Sat Nov 21, 2009 1:25 am
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| I'm assuming you're talking about a CC (if not, please tell me). Well.....can you tell me, if this IS a CC, what the balance is on this? It DOES help if you can make a payment BEYOND the 'min due'. ..it will show up on your CR that way. I believe it will gt paid faster, this way, as well. However....the only thing I can say is (just putting my '2 cents' in here..) you need to do what works for you. CAN you afford to send more right now, etc.? Everyone's financial situation is different. |
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marcusandila
Joined: 27 Oct 2009
marcusandila's page
Posts: 148
3025 Magic Points
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Sat Nov 21, 2009 3:28 pm
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yes. i was referring to credit cards. each balance is around 650 & 1 is like 3000 and the other is like 1600. not sure exactly off the top of my head, but i could check if you need the ACTUAL number. they are lower balances. that's why i was thinking that. yea, i can afford more than the minimum & i do pay that now. but i was wondering if i should try just paying the minimum and saving the other to put on the credit card(s) in one big chunk.
i dont think it would work too well for like my student loan/personal line of credit. mortgages yes, but should be done as soon as possible to avoid lots of interest. like in the beginning of the year when people get taxes or whatever. i dont know.
it was just a theory lol |
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FreedomDM
Joined: 28 Oct 2009
FreedomDM's page
Posts: 71
Location: Florida
1569 Magic Points
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Subject: A fine Idea..
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Mon Nov 23, 2009 4:12 pm
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I think if you have the ability to pay more each month you should do so, indifferent to the saving funds over the course of the year. The faster your balances are reduced the better your credit score can be. So, if you were to wait till the end of a year to send in the saved funds from months passed, you’ve allowed your balances to stay at a higher rate for said time saving.
Either way is fine but looking at the bigger picture you want to pay your balances down as fast as possible.
If you’ve decided to stop using the cards indefinitely a consolidation program like ours would allow you to put more money to the balance each moth with reduced, fixed interest rates in our program.
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Michael J Brazier
Non-Profit Budget Counseling |
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marcusandila
Joined: 27 Oct 2009
marcusandila's page
Posts: 148
3025 Magic Points
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Tue Nov 24, 2009 5:51 am
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thanks freedom, that answered my question exactly. i know its a matter of personal choice/preference. I was just wondering what other people thought about the idea & which would be a better option.
im still contemplating the idea of consolidating. i think i may just try to take care of it on my own. we arent sure yet, and still talking about it. |
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FreedomDM
Joined: 28 Oct 2009
FreedomDM's page
Posts: 71
Location: Florida
1569 Magic Points
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Subject: Happy to help
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Tue Nov 24, 2009 3:17 pm
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and looking at your options, if u decide to close the accounts definitely try and work something out direct before enrolling in a program like ours.
You can always tell me which creditors you have and what the current APRs are- i can then tell you what the APR would drop to in our program to start assessing benefits and savings.
For example, Cap1 goes to 7.4% in our program.
Citibank accounts go to 9.9%
First Premier goes to 0%
etc,
The hardest thing is for people to close their accounts, especially around the holidays.
Im here all day!
..sorta lol
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Michael J Brazier
Non-Profit Budget Counseling |
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marcusandila
Joined: 27 Oct 2009
marcusandila's page
Posts: 148
3025 Magic Points
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Fri Nov 27, 2009 4:36 am
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freedom, closing accounts isnt hard for me. i can understand how it would be for most people. i pay cash for the holidays. im like that because i dont want to finance christmas n pay a bunch more for something i "got on a great deal".
we only use our credit cards for major purchases like appliances or whatever. that we really need & we have a credit card for just at the vets office.
creditcards:
GE Money
capitalone
household bank
then i have a citiflex account [not a creditcard, sorta like a credit line thing]. |
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