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March 18, 2023 at 5:07 pm #80195Gabby
I want to start the snow ball method and currently I have
Card 1 845.73 (19.99%)
Card 2 942.47 (19.99%)
Card 3 2797.45 (20.99%)
Line of Credit 4881.81 (16.99%)
I’m planning on paying 300$ a month on these (minimum, then the rest on card 1, then once paid off, card 2 etc).
My question is, I am expecting about 2500$ tax refund in may/June, should I put it on card1, then leftover on 2 etc, or should I just knock out Card 3 then increase my payment to my other cards since I no longer have that minimum?
I’m hope this makes sense!March 18, 2023 at 5:07 pm #80196Bob
We did the snowball method once we had $1000 in our emergency fund and then we really worked our patootie’s off to pay down the debt in order to go to step number three. We paid off $40,000 in one year. ￼ Good luck.March 18, 2023 at 5:07 pm #80197Alicia
Personally I’d put it on card 3. It’s the highest interest and once the two smaller cards are paid off (fairly quickly with your snowball), you’ll be able to attack that line of credit with a vengeance!March 18, 2023 at 5:08 pm #80198Hannah
I’d recommend the avalanche method here. It feels like alot of debt but it will be gone in no time. XxMarch 18, 2023 at 5:08 pm #80199Missy
The interest is only 1% apart so it really doesn’t matter which you pay off. Right now you are paying 20% interest on $4600, after the lump sum you will be paying 20% interest on $2100 whether it is on one card or split up over two. I would probably pay the smaller two so I’m down to one payment. Paying card 3 will save you a very small amount of interest. You can’t go wrong either way.March 18, 2023 at 5:08 pm #80200Nancy
Do you have an emergency fund? If not, then I would put $1K in a separate savings account, then pay Card 1 and then the rest on Card 2. Continue paying the minimum on Card 3 and LOC. Once Card 2 is at $0, snowball Card 3 with minimum LOC…March 18, 2023 at 5:08 pm #80201Jamie
If you have enough to fully knock out the 3rd cc then do it. If not start at the bottom and work your way up. This is assuming you have your $1k starter emergency fund. If not set aside $1k for emergencies and then start at the bottom and work your way up.March 18, 2023 at 5:09 pm #80202Christina
I’d use the tax refund to pay off 1 & 2, keep the rest for an emergency fund. Then add the payments for 1 & 2 plus your extra each month to 3, while keeping up with the minimum on 4.March 18, 2023 at 5:09 pm #80203Patrisha
I made sure I had a $1k emergency fund before I started extra debt payments.
After that’s established, I use the snowball method (lowest balance first) but whenever I get a lump sum of money (windfall) I look to see if I can pay off 1 large account entirely. If so, pay off that account, if not…add it to your snowball. In your case, you can pay off one of your larger accounts completely, so I would put it towards CC 3. If you don’t have a starter emergency fund, I would put money towards that first though.