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Thread: Not sure what the best option is

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    #1

    Not sure what the best option is

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    I'm having a hard time thinking of what the best option financially would be for DH and I to make. Besides our regular monthly bills of rent, utilities, cars, insurance, and tv/internet/phone we only have two other bills to pay. Credit card and the living room furniture we got when we moved into our new house.

    Option 1: Pay off the credit card completely

    Option 2: Pay off half of the furniture

    It seems so simple, just pay off the credit card. But the CC has 0% interest. So I was thinking to pay off half of the furniture so that in the long run we end up paying less interest on that. But then I was thinking if we pay off the CC completely we could put that extra money towards the furniture every month. I don't know though. What would you do?!
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    #2
    Quote Originally Posted by caljmw649 View Post
    I'm having a hard time thinking of what the best option financially would be for DH and I to make. Besides our regular monthly bills of rent, utilities, cars, insurance, and tv/internet/phone we only have two other bills to pay. Credit card and the living room furniture we got when we moved into our new house.

    Option 1: Pay off the credit card completely

    Option 2: Pay off half of the furniture

    It seems so simple, just pay off the credit card. But the CC has 0% interest. So I was thinking to pay off half of the furniture so that in the long run we end up paying less interest on that. But then I was thinking if we pay off the CC completely we could put that extra money towards the furniture every month. I don't know though. What would you do?!
    Always put money towards paying off something with interest. Makes most sense in the long run. Pay off the furniture. Can I ask what credit card you have hat has 0% interest?
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    Quote Originally Posted by ArmyCupcake View Post
    Always put money towards paying off something with interest. Makes most sense in the long run. Pay off the furniture. Can I ask what credit card you have hat has 0% interest?
    Good point! The CC is Citi! When I sent in the info for the SCRA they lowered it to 0% instead of the 6%, but I'm not complaining!
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    My answer would depend on the balance on both the credit card and the furniture and the interest on the furniture.

    But my gut is to pay off the credit card ASAP. People trick themselves into thinking they are getting free money or a deal on a credit card when it is 0% interest. The companies know this and the 0% is often temporary knowing that people will get into a habit of carrying a balance. I would pay it off ASAP and get in the mind set of never carrying a balance month to month. I assume your rate on the furniture and the balance is fairly low, set up a budget and a plan to make the extra payments and pay off the balance within X number of months. I know that most will say to obviously pay of the furniture first because of the interest rate, but it's not a numbers game. The cost difference in these two options is probably equal to a nice dinner out. In the long run the few extra dollars spent on interest on furniture, is worth having the credit card paid off in full and making that a habit each month.
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    What is the interest rate on your furniture and are you sure the 0% on the card isn't a temporary rate? A lot of credit cards will offer 0% for the first however many months. It's usually best to pay off whatever has the highest interest rate first, so I would put the money towards the furniture, but you have a very good point about paying off the credit card and using what would be the credit card payment to pay extra on the furniture
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    Yeah definitely check into the interest terms, because if you end up having to pay interest it's gonna be compounded and cost you way more money. If it's truly no interest, pay the furniture.
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    How long is that credit card at 0%? If you'd be able to pay it off before it goes back up, it makes way more sense to pay off the furniture first. If you won't be able to do that before the 0% deal runs out, you will need to run the numbers and see what will cost you less in the long run based on how much you think you will have to put toward it each month. A fairly simple spreadsheet would be able to calculate that for you.
    Science always wins over bullshit. ~Dick Rutkowski
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    The CC is at 0% interest til DH gets out of the army. So that's another 2 1/2 years. Which we would definitely have it paid off by then.
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    #9
    Quote Originally Posted by caljmw649 View Post
    The CC is at 0% interest til DH gets out of the army. So that's another 2 1/2 years. Which we would definitely have it paid off by then.
    That's just crazy to me. I pay off my cc every month, have amazing credit and my capital one and visa both have significant interest rates. Again, not that it matters since I never carry a balance, but I'm amazed that they offer that and for so long. Good for you.
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    Quote Originally Posted by ArmyCupcake View Post
    That's just crazy to me. I pay off my cc every month, have amazing credit and my capital one and visa both have significant interest rates. Again, not that it matters since I never carry a balance, but I'm amazed that they offer that and for so long. Good for you.
    I really wasn't expecting it at all! But I'm very grateful

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