Anyone here have advice for paying off credit cards?

Seeking Advice
1

I got about $1900 from a class action lawsuit, and I’m thinking of using it to pay down some of my credit card debt. I have 8 cards in total, each with its own balance and APR:

  1. Bank of America - $3391, 26.74%
  2. Capital One Quicksilver - $2157, 28.74%
  3. Capital One Platinum - $205, 29.49%
  4. Citibank - $977, 28.74%
  5. PayPal - $729, 29.24%
  6. American Eagle - $99, 34.49%
  7. Target - $155, 29.95%
  8. Amazon - $228, 29.99%

I’m thinking of paying off the American Eagle card entirely since the interest is so high, but I’m unsure what to do next. Once this is done, I’ll have paid off around 25% of my debt!

Just a heads up, I know having 8 cards sounds wild. I got these cards during a rough period and I’m working on fixing it now.

2

I’d pay off cards 3, 5, 6, 7, and 8, then put a bit extra on 4.

3

Oli said:
I’d pay off cards 3, 5, 6, 7, and 8, then put a bit extra on 4.

Good plan. Feels great to clear out those small debts and have fewer cards to deal with. Good luck!

4

Oli said:
I’d pay off cards 3, 5, 6, 7, and 8, then put a bit extra on 4.

I worked in finance, and I had a similar situation with tons of cards. For me, reducing the number of cards made managing payments easier. Now I’m down to just four cards and no missed payments in years. Life’s less stressful with fewer cards to track!

5

@Shan
I juggle a bunch of cards for the rewards, and while I sometimes miss a payment, I just call and ask them to reverse it. Works for me so far! But yeah, I wouldn’t recommend it to everyone.

6

Oli said:
I’d pay off cards 3, 5, 6, 7, and 8, then put a bit extra on 4.

Good strategy, but seriously, that American Eagle card’s APR is insane. I’d knock that one out first.

7

Darby said:

Oli said:
I’d pay off cards 3, 5, 6, 7, and 8, then put a bit extra on 4.

Good strategy, but seriously, that American Eagle card’s APR is insane. I’d knock that one out first.

For real! A 34% APR is wild. Do people even know what they’re signing up for sometimes?

8

Tackle the smallest balance first, then roll what you were paying on that one into the next debt on the list.

9

Start with the smallest debts for sure.

10

Make sure you don’t owe any taxes on the lawsuit money before spending it.

11

Kieran said:
Make sure you don’t owe any taxes on the lawsuit money before spending it.

Nope, luckily, it’s all clear!

12

I’d knock out the smaller debts first, then focus on making just minimum payments on the big ones while throwing everything else at the next highest balance. Snowball method works like a charm!

13

Everyone here has great ideas! If you’re interested, there’s a book called ‘The Financial Feminist’ that has some good finance tips. Keep up the great work!

14

Have you looked into consolidating everything into one loan with a fixed rate? Could simplify things, then put the $1900 towards it.

15

You could start with the smallest balance and work up, then when those are paid, put any extra cash towards the higher balances. Just don’t close the paid-off cards right away!

16

If the BOA card has enough available credit, consider transferring some of the debt from those other cards to BOA. Then you’d have fewer payments to keep track of and save on interest long term. Use the $1900 to make a dent in the highest rates.

17

Just focus on the highest APR cards first if you can. Even shifting some balance from high to lower APRs can make a big difference over time.

18

High-interest cards make it hard to get ahead. If you can, start with cards 6, 7, 8, then work on 3, 5, and go from there. Cutting out that high APR interest is key!

19

Chan said:
High-interest cards make it hard to get ahead. If you can, start with cards 6, 7, 8, then work on 3, 5, and go from there. Cutting out that high APR interest is key!

Yeah, the high-interest cards should go first. Makes the biggest difference overall. It’s a real money drain keeping those open and paying just the minimums.

20

Why not use a bit of the windfall to reward yourself a little too? Sometimes that boost keeps the motivation going!