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Contributor

Due to an inheritance, I have $ 88,000. I have $63,000 in debt to credit cards. Breakdown:

 

A. $16,900 at 11.2%

B  $8,900 at 14.2%

C. $3,000 at 12.2%

D.  $11,400 at 12.5%

E. $ 14,300 at 7.8%

F.  $7,800 at 12.9%

G.  $670 at 3.9%

 

Due to cut backs at my husbands job, our financial ends don't meet by approx $ 1000.00 a month. Minimun payments on the credits cards is $1270.

Should I just lump sum pay it all off at once, or pay down with larger payments?   

3 REPLIES

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Hi StaciJ!

 

I am not a financial advisor, and I think you best bet would be to speak with someone who could provide you with different options on paying down this debt. If you call: 1-800-771-9960, a financial advisor will be able to guide you and answer any questions you may have.

 

I hope this helps - best of luck to you and thank you for posting in the community.

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Pay off the cards and burn them. Consider this a god send (enheritance)
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Paying off you credit cards is a great start, but I do not recommend closing all of the accounts. FICO credit scores are, in part, calculated by your debt ratio and how long the account has been open.

 

The following is advise I received when I had a similar situation and it has worked very well for me:

  • Payoff the highest interest cards first. If you can pay them all off, do it. Only use them if you know you can pay them off EVERY month.
  • Close all but the three that provide you the most benefit (rewards, cash back, etc...)
  • Of the money remaining from your inheritance, approx 2500, treat you and your family to a rejuvinating, relaxing experience, but dont spend more than 10% of your available funds.
  • Use the rest to establish an emergency fund. Contribute to it each payday until it reaches 3 months pay.
  • Create a budget and stick to it.

 

Good Luck!