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Posted in Paying Your Bills
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kreditkyle

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Best to pay off credit card or auto loan?
I have a few credit cards and an auto loan and want to decide what's best to pay off first.

2 x low amount (under 500) low interest cards
1 x mid amount (1000) no interest
1 x high amount (3000) high interest card

I also have an auto loan with remaining 2500 balance, equaling is 150/mo but also requires high insurance that's 200/mo, so 350 total/mo.

I'm coming into a $2,500 bonus and want to know if I should pay off the auto loan and lower my insurance and monthly cost, or if I should put all the money into the high interest card, or if I should pay off the 2 lower interest cards.

Part of me wants to pay off the car and ultimately put the money saved from insurance into the high interest cards, but not sure if that's best.

Thanks for the advice!

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Top Contributor
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Put the money toward the high interest card that has the high balance. That would most definitely be your best bet here. After that, it is up to you on what you want to tackle next, but if it were me, I would work to pay off the card with the lowest balance, then proceed on. Look around to see what you can sell to generate some extra funds or find some extra employment to get these debts knocked out.

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