We are currently getting hammered with the white stuff. So much, in fact, that the preemie’s mom told me not to come today. She did ask me if I could watch the baby all day on Monday, so at least the white stuff isn’t going to cost me the green stuff!
Snowflakes have been coming in more ways than one. We received an unexpected check of $185.50 from the payoff overage of the refi on our house. Woohoo! I’m sure you don’t need to ask where this is going! Additionally, another much smaller check came from General Mills in the form of a $2.49 rebate from a “try it for free” offer. Since the money for the protein bars (Hubs didn’t like them) has already been accounted for from our grocery budget, that too will go towards paying off our smallest credit card. The little amounts do add up!
Since I am homebound today on account of the Spring snowstorm, I’ve been spending some time doing some HITS on M-Turks. These tasks usually credit in a few days, which makes for quick payouts. I also have a little over $15 available that I can transfer to our bank account. No, M-Turks won’t make you rich, but again, every little bit helps.
Hubs and I discussed our budget again. It’s my favorite topic, his not so much. Lol While I wouldn’t go as far as to say he isn’t involved, he is just happy to see our progress and for the most part, lets me do my “numbers nerd” thing. Our budget doesn’t really change all that much, but we will have a decision to make once our smallest debt is paid off. As usual, I am looking ahead. This time it is at expiring interest rates. Below is what we (I) am looking at:
CC # 1 $2100 0%-Rate expires 6/19 but will be paid off by the end of April
CC # 2 $7000 0%-Rate will expire 6/19
Car $7031 1.99%-Fixed rate
CC # 3 $9747 Fixed rate of 5.99%
CC # 4 $11950 0%-Rate expires 11/18
Our reasoning for paying off the smallest debt is to keep gaining traction. It also gives us an available card *should* we need to do another balance transfer. No worries about us using these cards for other things. Once all this debt is behind us, ALL these accounts will be closed!
Come May 1st, what we are thinking about doing is moving CC #4 (the big guy) to the # 1 position. Doing so would give us a solid six months to knock out a good chunk of that debt. No matter what, before November rolls around, whatever remains must be moved as we have no intention of paying the insane interest rate attached to the card.
So here’s my question. Would you tackle these debts differently? Obviously I am no financial wizard, or we wouldn’t be in debt in our 50s. Before I get wet noodled, I also realize that doing balance transfers is not the Dave Ramsey way. As long-time readers know, we only went this route to gain some ground. While I wouldn’t recommend it for everyone, it is working for us.
Opinions?
I am in a similar boat where one of my intro APR’s will expiring in 2/2019 and it will be really ugly. So, I will be re-sorting my order myself. For me, most of my cards have comparable APR rates. A few of them higher than others. My Lowe’s has a fixed rate. But if the big balance is going to have an ugly APR, I would attack that as much as possible before that APR hit. My only thing I don’t like about balance transfers is that you add debt because of the transfer fee. If you able to be disciplined on the balance transfer, then go for it. Me… I’m not that disciplined.
Rhitter recently posted…On Budget Meeting – April 2018
The cost of the transfer of course also needs to be considered. Remaining disciplined thankfully hasn’t been an issue for us. We just weren’t making much progress with the mega-interest rates, hence doing these transfers.
Oh I can relate to the mega-interest… I did a comparison a while ago of how much interest I pay per month… not very pretty. But I need to learn discipline first. THEN I will be able to do the balance transfers.
Rhitter recently posted…On Bi-Weekly Progress Report – 04/01/2018
Without a doubt, getting rid of the mega-interest rates has helped with our debt snowball. As for discipline, it doesn’t come easy, but I want the debt gone so bad I won’t let anything step in my way!
I would pay of the 0% interest cards as quickly as possible knowing they could go up significantly when the grace period is over. Picked up my rings today…..was “ONLY” $532 instead of the $551 they quoted me, so I have to come up with $532, which I’ve already found $18, so $514 to go by the end of the month.
Boy are we having different weather – it has been in the 80’s here – going to be a L-O-N-G summer.
Always good when the bill comes in under the estimate! You are well on your way to replacing the money in your savings account! Hubs and I continue discussing our interest rates and are definitely leaning towards attacking the biggie next.
I’d make cc#4 top priority to get as much of that paid before the 0% expires and then hope against hope that you can find another 0% offer to roll whatever is left on it and close it down.
I’m all about large debt/biggest interest rate first.
Sluggy recently posted…2018 Food & Toiletry Spending…..March Edition
I was hoping you’d chime in Sluggy. Given our interest rates and when they expire, would you make #4 the biggest priority, even over #1?
I agree with what Sluggy wrote, especially if you cannot get the larger balance to another 0% card.
All these comments are giving me a lot to think about! Thank you!
If it were me, I’d tackle CC3 first because it has ongoing interest accruing with a sizable balance. That said, we all seem to have different opinions which means there probably isn’t a clear, winning decision. The fact that you’re aggressively tackling these debts in whatever order is inspirational to all of us and reason to cheer you on!
While I’d like to do something about the card with the ongoing interest, my concern is more for the one that will skyrocket when the promo rate is over. The big reason we went with the 5.99% fixed was that we knew it would be unlikely to pay it all off before all the promos ended. I do find all the different opinions interesting and am weighing all the feedback I’ve received. I appreciate all the encouragement. One way or another, I am bound and determined to get all this debt paid off!
You did not specifically say so, but you do realize that the interest from the original balance is all due when the 0% interest date occurs. You will owe all the interest you have avoided but all of a sudden, it is all due since you did not pay the whole balance. I would concentrate on I would make #4 my priority, a big priority.
Practical Parsimony recently posted…Could this be the Easter Bunny? Flowers!
This isn’t entirely true, Linda. It all depends on the credit card. With the transfers we did, the only thing that will happen is the interest will skyrocket on the remaining balance. No back interest would be owed. You can read more about this HERE.
Thanks. I was not aware.
Practical Parsimony recently posted…March Goals and How I Did
No problem. This is the only way I would do a transfer!
I agree, I would make #4 the priority. If it’s not paid off by the end of the term, I would switch it to another 0% card. Any choice you make is really a win, as you are making good decisions. As long as the debt gets paid off, it doesn’t really matter which way you do it. As my mother tells me, as long as you are moving in the right direction you are winning.
As of right now, focusing on #4 will be the plan once #1 is paid off. Whatever isn’t paid off will get transferred to another 0% card. Thankfully we have excellent credit.
That’s a tough one. Dave wants you to have wins, that is why he says smallest to largest. However with the crazy interest rate I understand why you want to do the bigger one first. I would just pick whichever one you feel more comfortable doing and attack that one. As long as you knock one out and are seeing numbers go down.
This is what we are struggling with, hence deciding to knock out our next smallest one ($2100) next. We are ultra-focused, so at this point, I’m okay with attacking the biggie once this smaller debt is knocked out.
Great job! How much are you paying on each card each month?
The 76K Project recently posted…March Budget Review: How’d We Do?
cc #2 has been getting $125, the car $300, cc #3 $200, cc #4 is getting $250. I round up even though the minimum payments are a bit less. As for cc #1, at a minimum, it will get $700, but I’m hoping to pay it off in full. Our income is extremely irregular, so it all depends on what we actually bring home.
In contrast to the above, and having the unfortunate personal experience of paying off over 60k, much of it credit cards….follow Dave’s plan. I did balance transfers as well – but focused in balances only for payoff sequence. If it was about math you would not be in this boat. ….The plan works. My vote is yes look for a balance transfer opportunity…. but focus on paying off the lowest balances in order….you may need to transfer part of the debt to one of those paid off cards to get part back to 0% …..Dave’s plan works,…
Thank you for this! I think it is exactly what I needed…a reminder to stick with the plan. I’ll be discussing this with the Hubs and will update everyone on what we ultimately decide to do.