Wednesday, March 25, 2009

Credit cards, interest rates, plan of attack

My credit card interest rates are as follows:


I haven't updated my list of credit card debt as I usually only do it at the end of the month. But essentially:
  • I received a 6 month balance transfer promotional rate offer (3.99%) for Card 2. As Card 2 only had about $1,500 available, last month I transferred that balance to Card 3 to free up the credit.
  • Card 5 was my highest credit rate, so I transferred part of that to Card 3 last month and paid some off.
  • I have now transferred the rest of Card 5's balance to Card 2, so have reduced the rate from 15.49% to 3.99% - but I HAVE to pay it off in 6 months.

So when I next update my credit card list, Card 5 will have a balance of $0 (I know this is mainly due to balance transfers, but since it has been sitting around $9K for some time it is a nice feeling to get rid of it!) and Card 2 will have a balance of close to $5K.

My plan of attack is:

  1. Pay off Card 1 (now down to about $1,500) - smallest balance and highest interest rate
  2. Pay off Card 2 - need to pay off within 6 months or the interest rate will increase dramatically. I first about tackling it first but I should be able to pay both Card 1 and Card 2 off within 6 months - and if worst comes to worst I am expecting my tax refund before the 6 months expires.
  3. Pay off Card 3
  4. Pay off Card 4 - low(er) interest rate for the life of the balance so out of my credit cards, this is my lowest priority.

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