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JohnDoeAnon

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Pay down auto loan or credit cards first?
Hey all,

I recently purchased my first vehicle at an interest rate way too ridiculous - 15.99% and the auto loan is just at $14,000. I also have roughly $4200 in credit card debt that is ranging from 17%-22% interest across the cards.

My question is, which should I focus on paying down first for the cheapest option?

One card is at $600, another at $2,100, and another at $1,600. Auto loan is shy of $14,000.

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TryingToUnderstand is absolutely correct. I would also like to add you should pay off your HIGHER INTEREST card first.  Some people think they should pay the higher balance. but from a financial standpoint it makes more sense to rid yourself of the higher interest cards. 

Here's how the researchers say it should be done: "To minimize the total amount of debt across loans, people should first pay the minimum payment for each debt (to avoid surcharges and penalties) and then use all available cash to pay down the loan with the highest interest rate. After this loan is paid off, people should move to the loan with the next highest interest rate, and so on."

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Pay your credit cards off first.

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Because credit card (revolving) utilization has more bearing on your scores and the cards have a higher interest rate than the auto loan. Try to refi your auto in 6 months to a year.

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