advice please **update in post 6 with interest rates**

[JamieB]

OK so DH and I are horrible with money and ran up a huge visa bill. We also owe money on our van (about half of what we owe on the visa). I don't know what my interest rates are () but my minimum payment on my visa is 185 ad my van payment is 214 a month.

So between some room I have on a much lower interest credit line, our tax refund and some money I have saved, I can pay off the van completely nd pay half of the visa. Or I can pay off he whole visa and put nothing on the van.

I'd be crazy not to pay off the visa right? The only reason I wouldn't is because we're so bad will spending i'm afraid we'll rack up the visa again and be in the exact same spot again. At least once the van is paid, it's done until we need another vehicle. This is a really big worry for me. Our tax refund last year also went to our visa. DH really wants to pay off the van. Advice please?

Whatever I do i'll definitely get the limit on the visa lowered after it's paid. It's all consumer debt for things we didn't need

[confustication]

I think I'd pay off the van and half the visa- then throw the van payment at the visa until it's all paid off. I'd also stop carrying the visa so it didn't get used.

[Ola_]

I would check the interest rates - my strategy would depend largely on how much you're paying in interest on each.

[MeepyCat]

What are the interest rates involved? What's the payoff amount on the van vs. the number of months left? And what's the amount owed and the interest rate on the visa?

Basically, you want to determine whether you save more money in interest by paying off the van vs. paying off the credit card bill.

I definitely agree that you should stop carrying the visa, and take the info for that card off of Amazon, PayPal, etc. One-click ordering is a menace.

[JamieB]

19.5% for the visa and 8.84% for the van

[cappuccinosmom]

I think I'd pay off the van and half the visa- then throw the van payment at the visa until it's all paid off. I'd also stop carrying the visa so it didn't get used.

I'd do this. If you've been paying minimums on both, that would mean you'd be able to pay nearly $400 monthly on the last half of the visa, and be done with it quick.

In my view, both car and card debt stink, so it wouldn't matter to me which I'd pay off first (except paying off the car protects you from repo, just thought of that), as long as I was committed to putting that former payment onto the other debt and killing the second one quickly too.

[MeepyCat]

Originally Posted by JamieB

19.5% for the visa and 8.84% for the van

Visa first.

[leavemealone]

I would pay off the van and then the visa.

ETA: I cross posted while the interest rates were being posted. I would still pay off the van first. If your income is greatly reduced in the family, the van can be repo'd if payments are not made. If it's relied upon to get someone to work, losing it can affect their ability to earn income. Also, paying off the van would free up more money to be applied towards the Visa. There's not a whole lot that can be done if the Visa isn't paid. That's not to say the Visa shouldn't be paid, but I would consider how important the van is in getting to/from work or other places (school, drs appts, etc).

[JamieB]

Originally Posted by MeepyCat

What are the interest rates involved? What's the payoff amount on the van vs. the number of months left? And what's the amount owed and the interest rate on the visa?

Basically, you want to determine whether you save more money in interest by paying off the van vs. paying off the credit card bill.

I definitely agree that you should stop carrying the visa, and take the info for that card off of Amazon, PayPal, etc. One-click ordering is a menace.

interest rates are 19.5 for the visa and 8.84 for the van

I have no idea how long the van loan is for but it is 214 a month and we owe $4800.

The minimum payment on the visa is 185 and we owe 12 000. Even if I put all the money on it I would still owe about 1000.

[confustication]

Even with the interest rates, I would pay off the van- both because then it can't be repo'd and because that is a larger chunk to throw at the visa each month. However, both would be secondary to deciding not to take on further unnecessary debt.

[JamieB]

Originally Posted by sandcastle

I would pay off the van and then the visa.

ETA: I cross posted while the interest rates were being posted. I would still pay off the van first. If your income is greatly reduced in the family, the van can be repo'd if payments are not made. If it's relied upon to get someone to work, losing it can affect their ability to earn income. Also, paying off the van would free up more money to be applied towards the Visa. There's not a whole lot that can be done if the Visa isn't paid. That's not to say the Visa shouldn't be paid, but I would consider how important the van is in getting to/from work or other places (school, drs appts, etc).

Would it make a difference if there was no danger of the van being repoed? We have no issues making our payments. I know, I know. Ask me why we don't just save up money to buy the stuff we want then

[russsk]

I would pay the visa off first, because compound interest is just evil! If you just pay the minimums, even on half that amount, it could take you a very long time to pay it off. Your van, on the other hand, has a fixed term and doesn't compound interest on interest. I think pps have a valid point, that your van could be repo'd, but that would probably be of lesser priority to me than getting everything paid off for the least amount of money and time possible. I guess you have to decide what's more important to you - the security of owning the van outright, or paying off the entire debt for as little money as possible. Before you do anything, though, you need to find a way not to use that card ever again!

[leavemealone]

Originally Posted by JamieB

Would it make a difference if there was no danger of the van being repoed? We have no issues making our payments. I know, I know. Ask me why we don't just save up money to buy the stuff we want then

I don't know. Unless the loan is from family, then it probably could be repo'd without payments. If that is the case, I might change my mind if the loan was from a family member, but I'd probably still go with the one I could pay off first (in this case, the van). I kind of follow Dave Ramsey in that method but I'll also be quick to admit that I'm not the best person to ask for financial advise given our recent situation. For me, the satisfaction of paying off a debt and moving on towards paying off the next one would be worth it.

[Knittin' in the Shade]

with that interest rate on the visa, I would absolutely pay that off, and then CUT UP THE CARD. Seriously, you need to stop using it, period. Then I'd take whatever money you had been paying on the card each month and add it to your van payment so you can get that paid off that much faster.

[mtm]

I think as long as you're getting your act together money wise, building a budget and getting rid of/no longer using your cc, it doesn't really matter which one you pay off first. I'd likely do the van to have that debt gone, with the rest plus what you were paying on the van going to the cc.

[newbymom05]

Originally Posted by Knittin' in the Shade

with that interest rate on the visa, I would absolutely pay that off, and then CUT UP THE CARD. Seriously, you need to stop using it, period. Then I'd take whatever money you had been paying on the card each month and add it to your van payment so you can get that paid off that much faster.

Totally. Or just leave it at home in a hard to reach place. A lot of times when I give myself a day or so to cool off, I'll decide against a purchase anyway, even if it's only because I'm not willing to go back to the store.

[ArtsyMomma]

I'd pay off the van, then put whatever is left on the visa. I'd then roll the payments from the van plus anything else I could get my hands on to the visa. The bigger issue of course is not adding to your debt! Oh, I'd also want to have a 1000 emergency fund set up first, not sure if you've done that yet.

[nd_deadhead]

The big issue you have is getting rid of that Visa card! It doesn't matter which you pay off first, if you keep using the Visa.

If you pay off the van, and half the Visa, then apply that payment to the CC, you will have the card paid off in 18 months, with payments of $400/month. You might want to call the CC company and see if they will lower your interest rate - right now you are paying more in interest ($195/month) than your payment! But if you pay off a big chunk of it and increase the payment, the balance will go down pretty quickly.

But here's what I suggest:

Apply your tax refund to the Visa, and cut up that card! Don't touch your savings, or mess with a balance transfer, unless you can get rid of the Visa completely, because that's just trading one problem for another.

Make the biggest payment you possibly can on the Visa each month, to pay it off as quickly as you can. Use the savings as an emergency fund, to keep from using the credit card.

Good luck!

[Ola_]

After seeing the interest rates I'd totally pay off the Visa first. As soon as you're done with that put the extra money (the amount you were paying monthly on the Visa) towards the car loan to get that done with sooner. That will save you the most money in interest.