Pay off credit card, or put it towards my principal? - FMVperformance.com : The site for all your Ford Mazda and Volvo needs
View Poll Results: What should I do with the money?
Pay off the credit card 25 89.29%
Put it all towards the principal of the car loan 2 7.14%
Put half towards the car, half towards the credit card 1 3.57%
Voters: 28. You may not vote on this poll

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post #1 of 15 (permalink) Old 06-12-2004, 02:52 PM Thread Starter
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Pay off credit card, or put it towards my principal?

I'm receiving about $1800 from an accident I was in. My Sentra SE-R was totalled, which is why I bought a 3. What do you guys think the best use of this money will be? I have a balance of $1400 on my credit card with an interest rate of 10%. My car loan is 3.9%, but the value of the car is rapidly decreasing as well. Should I pay off my card or put it all towards the principal on my car loan? I can also split it down the middle. Any other suggestions are welcome.

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post #2 of 15 (permalink) Old 06-12-2004, 02:56 PM
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Pay off credit card, or put it towards my principal?

look at the interest rates... I think that answers that

Actually the remainder of the car loan should be decreasing more rapidly than the value of the car. For instance, after 1 year I'm already right side up on my car loan... or at least about even (around $19k in value in the car, and $19k left on the loan).
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post #3 of 15 (permalink) Old 06-12-2004, 04:09 PM Thread Starter
Grand Am Series
 
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Pay off credit card, or put it towards my principal?

Quote:
Originally Posted by "MZ6ZoomZoom"
Actually the remainder of the car loan should be decreasing more rapidly than the value of the car. For instance, after 1 year I'm already right side up on my car loan... or at least about even (around $19k in value in the car, and $19k left on the loan).

My problem is I put a lot of miles on my car. I've put on 4600 miles in about two and a half months. Starting in November I'm gonna move, and that might add an additional 100 miles (round trip) to my commute. Thats why I think the combination of my car loan and decrease in value of the car may equal, or greater than, the credit card.

That said, I'm still leaning towards paying off the card.

Edit: Do you have a good formula for figuring out the value of a car that is less than a year old? It's going to be some time before Edmunds and KBB will calculate the value of a used 3.

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post #4 of 15 (permalink) Old 06-12-2004, 10:25 PM
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Join Date: Dec 2003
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Pay off credit card, or put it towards my principal?

I say pay off the card. With the interest rate you will end up paying a lot on your balance. With the extra money you have left over each month with not having a credit card bill you can put that towards the car, if you are worried about the value.

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post #5 of 15 (permalink) Old 06-12-2004, 10:43 PM
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Pay off credit card, or put it towards my principal?

Always pay off your higher interest rate loans, even if the other one is decreasing in value. You'll pay 140 bucks a year on the credit card in interest alone, while your car's devaluation is going to level off pretty quickly. Besides, are you planning on selling your car any time soon? Because if you're not, the immediate value doesn't matter. Also, after you pay off the credit card you can put that money toward paying off your car sooner, then you can save money that way too.
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post #6 of 15 (permalink) Old 06-13-2004, 06:13 PM
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Pay off credit card, or put it towards my principal?

this shouldn't even be a question. Pay of your Credit card. NOW!


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post #7 of 15 (permalink) Old 06-13-2004, 10:48 PM
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Pay off credit card, or put it towards my principal?

Yeah dude, even if your car is losing value fast, that's irrellevant to how much the loan is costing you. Pay off the credit card - that interest rate is much higher.

And no, there is no real good formula right now, hence why KBB doesn't have anything yet.
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post #8 of 15 (permalink) Old 06-14-2004, 12:51 AM
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Pay off credit card, or put it towards my principal?

Pay off the card.
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post #9 of 15 (permalink) Old 06-14-2004, 08:31 AM Thread Starter
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Pay off credit card, or put it towards my principal?

Quote:
Originally Posted by "SBTanMan"
Besides, are you planning on selling your car any time soon? Because if you're not, the immediate value doesn't matter. .
It does matter if I get into an accident or the car is stolen.

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post #10 of 15 (permalink) Old 06-14-2004, 03:11 PM
civiclad
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Pay off credit card, or put it towards my principal?

Based on the higher interest rate for your Credit card....I would suggest you pay off the balance on your credit card first. Then, whatever you have left over you can put towards your car loan.
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