This is completely hypothetical, I am just curious. (Note: this seems like a bad idea whatever way you slice it, I am seriously just doing a thought exercise. I don't own a car.) Let's say you have a credit card and an auto loan and both payments are due the same day.
Credit Card:
balance: $2000
minimum payment: $50
Auto Loan:
minimum payment: $300
Usually my credit card fine print says there is a 25 day grace period on new purchases so what if, instead of making my auto loan payment with cash, I charge it and then make an immediate payment of $350 to my credit card. Since the payments are supposed to go toward the portion of the balance with the highest interest, my credit card balance would be $1650 with X% interest and $300 with 0% for 25 days when all $1950 reverts to X% interest.
Why wouldn't this work? Oh and I understand the human part of the equation but let's pretend this is the computer from War Games making the payments and not a person. Would this technically pay down credit card debt faster?
Credit Card:
balance: $2000
minimum payment: $50
Auto Loan:
minimum payment: $300
Usually my credit card fine print says there is a 25 day grace period on new purchases so what if, instead of making my auto loan payment with cash, I charge it and then make an immediate payment of $350 to my credit card. Since the payments are supposed to go toward the portion of the balance with the highest interest, my credit card balance would be $1650 with X% interest and $300 with 0% for 25 days when all $1950 reverts to X% interest.
Why wouldn't this work? Oh and I understand the human part of the equation but let's pretend this is the computer from War Games making the payments and not a person. Would this technically pay down credit card debt faster?
