uum hi…
"I’m thinking about getting a $2,800 loan with a 14% APR, which would mean a flat $80 monthly payment until it’s paid off. I have three credit cards: the first has a balance of $471.30 with 0% interest until next June and a $25 monthly payment. The second has a balance of $3,282.45 with a 28.24% interest rate and a $130 monthly payment. The third has a balance of $1,025.49 with a 20.49% interest rate and a $112 monthly payment.
I’m currently in therapy to address my financial irresponsibility, and I’m planning to completely close my credit card accounts. My idea is to use the loan to pay off Card 3 entirely, then put the remaining amount towards Card 2. This way, I can eliminate the $112 monthly payment and significantly reduce the payment for Card 2. I’ll keep paying down Card 1 as it only requires $25 a month and doesn’t have any interest for now. Does this sound like a solid plan? I chose the loan because it offers a lower monthly payment and interest rate."
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simply rearranging debt,additionally, you run the risk of quickly tripling your debt if you don’t follow through on the plan to pay off the credit cards with the loan and shut them right away. Just concentrate on paying off the smallest sum first, followed by the next largest, and so forth. I would immediately shut all of my credit cards and begin the arduous task of paying each one off one at a time.
I’m grateful. I am closing the cards right now, which is one of the main reasons I considered doing it. However, this makes sense!
Look up “Debt Snowball” by Dave Ramsey.
"Along with the advice others have given, I think it’s important to also shift your mindset.
You mentioned getting rid of the $112 monthly payment and reducing the payment on Card 2. While it’s good to focus on monthly budgeting, it’s risky when taking on debt because an affordable monthly payment doesn’t always mean the overall cost is manageable. It’s like those stories you hear about people with huge student loans who only pay the minimum, barely making a dent in the principal while the interest keeps the total amount owed almost the same. If you’re only paying the minimum or close to it on high-interest debt, you’re likely to stay in debt for a long time. To really pay it down, you need to pay well above the minimums.
So when you talk about paying off a card with a lower balance and interest rate because of the monthly savings, instead of tackling the higher balance with a much higher interest rate that’s costing you more, it highlights how this thinking can hold you back.
Some people suggest the snowball method, and while it has its benefits in keeping you motivated, the debt avalanche approach is more efficient. It will save you more money on interest, and with your relatively low amount of debt, the psychological difference is minimal."
Nope. Slice them open. Repay them. No fresh loans. Observed