Pay off debt or save? - Ask Rich / Money 101

toothfairy03 · 06-04-2009, 09:43 PM

DH and I have 2 credit cards. I've averaged $300 per pay day to pay both of them off in 6 months. Its deployment time and DH asks me to save and pay those bills off. Are we being smart to pay off all our debt now and save little for the next 6 months?

I always thought that its better to have savings and pay the minimum on the cards. Since the recession and all.

LuvMySailor4ever · 06-04-2009, 10:57 PM

it really depends on your APR on those credit cards. If they are high (above 10%) and they charge you a finance charge every month, than it would be in your best interest to pay them off, and not use them (at least if you're not paying them off every month) once you have zero credit card debt, then i would save...but if you feel you're paying more than interest on your card payments, then by all mean save and pay off at the same time. Just watch out for those crazy finance charges, they can set you back.

Kisha · 06-04-2009, 11:02 PM

I paid mine off and then saved because of the apr that I had on my credit cards.

**Jamie** · 06-04-2009, 11:03 PM

The benefit to deployment is the SCRA...the interests have to go to 6%. Ofcourse you have to notify the creditcard companies of the deployment.
IMO, I would pay off the creditcards first then save. The longer it takes to pay off a credit card, the more money you spend in the longrun.

USCsemperfi · 06-04-2009, 11:04 PM

PAY OFF THE CARDS!!!

Ahhh. You'll occur so much interest from just paying the minimum. Look at that as a type of savings.
Get yourself out of debt hun. You'll feel so much better.

BubblesofBeer · 06-04-2009, 11:09 PM

Pay of the cards!!!! I just watched Suze Ormann on Oprah and she said it's pointless to save money while carrying a balance and paying interest on credit cards.

Her website has a whole bunch of steps on a good way to do it!

shellbellwillis · 06-04-2009, 11:24 PM

Originally Posted by **Jamie**

The benefit to deployment is the SCRA...the interests have to go to 6%. Ofcourse you have to notify the creditcard companies of the deployment.
IMO, I would pay off the creditcards first then save. The longer it takes to pay off a credit card, the more money you spend in the longrun.

The SCRA only works if the Credit Card was in use PRIOR to MM active duty or activation.

Clarifies and restates existing law that limits to 6 percent interest on credit obligations incurred prior to military service or activation, including credit card debt, for active duty servicemembers. The SCRA unambiguously states that no interest above 6 percent can accrue for credit obligations (that were established prior to active duty or activation) while on active duty, nor can that excess interest become due once the servicemember leaves active duty – instead that portion above 6 percent is permanently forgiven. Furthermore, the monthly payment must be reduced by the amount of interest saved during the covered period.

Note: This law only covers debt incurred prior to military service.
http://www.military.com/benefits/leg.../scra/overview

BubMunkeyBles · 06-05-2009, 12:34 AM

I'd have some kind of emergency fund (we only have 1K in ours) and then work on the credit cards...

TheBryTree · 06-05-2009, 12:44 AM

As long as you have some sort of safety net.. I'd pay off the cards. if you just pay minimum, you'll be paying WAAAAY more than you ever meant to. A 20 dollar pair of shoes could become 100 dollars.

I agree about looking up suze ormann. She is a genius.

~TiffanyC~ · 06-05-2009, 12:58 AM

The credit cards must be in the deployed soldiers name in order to get the lower rate. If they are then you'll save money by not paying higher apr but you still owe what is ont he cards. If I was in your shoes I would pay the lowest one off first every dollar counts then out what payment you were making the one you paid off to the larger one along with the normal amount you paid. Don't pay the min. You will lik eothers have said pay too much over all. It's smart to have a back up emergency fund, even 500 for car repairs or tires or what not is a great plan. Saving money right now in banks isnt a good choice because you won't nearly make enough off of interest that you're paying out in credit card interest. You'll figure it out. Good luck.

06-04-2009, 09:43 PM	#1 (permalink)
toothfairy03 Missing My Riverine! Join Date: Mar 2006 Location: Virginia Beach and looking to go to Great Lakes, Coronado, or Hawaii! Posts: 1,006 Classifieds: (0) Activity: 17% Longevity: 61%	Pay off debt or save? DH and I have 2 credit cards. I've averaged $300 per pay day to pay both of them off in 6 months. Its deployment time and DH asks me to save and pay those bills off. Are we being smart to pay off all our debt now and save little for the next 6 months? I always thought that its better to have savings and pay the minimum on the cards. Since the recession and all. __________________ I've Replaced and with some hardcore

06-04-2009, 10:57 PM	#2 (permalink)
LuvMySailor4ever ~MARIE~ Join Date: May 2009 Location: Me: NAS Lemoore DH: Back on the Ship & Heading Home Posts: 1,699 Classifieds: (0) Activity: 3% Longevity: 8%	it really depends on your APR on those credit cards. If they are high (above 10%) and they charge you a finance charge every month, than it would be in your best interest to pay them off, and not use them (at least if you're not paying them off every month) once you have zero credit card debt, then i would save...but if you feel you're paying more than interest on your card payments, then by all mean save and pay off at the same time. Just watch out for those crazy finance charges, they can set you back. __________________ NO MORE TICKER! THE LOVE OF MY LIFE IS HOME FOR GOOD

06-04-2009, 11:02 PM	#3 (permalink)
Kisha Senior Member Join Date: Mar 2008 Location: Aurora, CO Posts: 112 Classifieds: (0) Activity: 0% Longevity: 27%	I paid mine off and then saved because of the apr that I had on my credit cards. __________________ ~Kisha~

06-04-2009, 11:03 PM	#4 (permalink)
Jamie HellloooooMrGovernor!!! Join Date: Feb 2009 Location: PA/My Heart-Iraq Posts: 1,789 Classifieds: (0) Activity: 11% Longevity: 13%	The benefit to deployment is the SCRA...the interests have to go to 6%. Ofcourse you have to notify the creditcard companies of the deployment. IMO, I would pay off the creditcards first then save. The longer it takes to pay off a credit card, the more money you spend in the longrun. __________________ NO MORE TICKER!!! HE"S HOME!!

06-04-2009, 11:04 PM	#5 (permalink)
USCsemperfi All you need is love, love is all you need. Join Date: May 2009 Location: Columbia, SC Posts: 1,374 Blog Entries: 1 Classifieds: (1) Activity: 62% Longevity: 8%	PAY OFF THE CARDS!!! Ahhh. You'll occur so much interest from just paying the minimum. Look at that as a type of savings. Get yourself out of debt hun. You'll feel so much better. __________________ My Wives: Drea&Pat.USMC and fallinstar (aka perfection) TayreehBaykur's Ginger!

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06-04-2009, 11:09 PM	#6 (permalink)
BubblesofBeer Where the sun and the sand and the surf meets the land Join Date: Nov 2008 Location: WeHa <3 Posts: 7,540 Classifieds: (0) Activity: 40% Longevity: 16%	Pay of the cards!!!! I just watched Suze Ormann on Oprah and she said it's pointless to save money while carrying a balance and paying interest on credit cards. Her website has a whole bunch of steps on a good way to do it! __________________ תיקבה אמונה אהבה

06-05-2009, 12:34 AM	#8 (permalink)
BubMunkeyBles MilitarySOS Jewel Join Date: Feb 2008 Location: Me- Tampa, FL, DH- Aviano AB Italy Posts: 6,558 Classifieds: (0) Activity: 85% Longevity: 29%	I'd have some kind of emergency fund (we only have 1K in ours) and then work on the credit cards... __________________ Stephanie

06-05-2009, 12:44 AM	#9 (permalink)
TheBryTree Senior Member Join Date: Sep 2007 Location: here and there Posts: 23,022 Blog Entries: 1 Classifieds: (0) Activity: 81% Longevity: 37%	As long as you have some sort of safety net.. I'd pay off the cards. if you just pay minimum, you'll be paying WAAAAY more than you ever meant to. A 20 dollar pair of shoes could become 100 dollars. I agree about looking up suze ormann. She is a genius.

06-05-2009, 12:58 AM	#10 (permalink)
~TiffanyC~ Junior Member Join Date: Jun 2009 Location: Ft. Lewis, WA / Puyallup Posts: 6 Classifieds: (0) Activity: 0% Longevity: 7%	The credit cards must be in the deployed soldiers name in order to get the lower rate. If they are then you'll save money by not paying higher apr but you still owe what is ont he cards. If I was in your shoes I would pay the lowest one off first every dollar counts then out what payment you were making the one you paid off to the larger one along with the normal amount you paid. Don't pay the min. You will lik eothers have said pay too much over all. It's smart to have a back up emergency fund, even 500 for car repairs or tires or what not is a great plan. Saving money right now in banks isnt a good choice because you won't nearly make enough off of interest that you're paying out in credit card interest. You'll figure it out. Good luck.