Pay off credit card debt or pay off car?
Question: First off I make about $3600 a month in net pay. My aunt( who is quite wealthy) recent gave me $16.000 to pay off my new car. The problem is that I have had some economic problem that has landed me into $16.000 in credit card debt. I would say the combined payments is about $700 a month, whereas my car payment is $356. If I paid off the debt. all I would have is my $740 a month mortgage and car payment.
Being that she is 80 yrs ld and failing health, I havent told her about the debt. So my question is, should I pay off the car or the credit card debt?
Answer: The answer is simple. You were given money for a specific purpose. Use it for that purpose. Take the money that you were paying for the car payment, and add that to the minimum payment of your highest interest credit card. That way, you will eventually get all your debts paid off.
You should also look into a home equity loan, to pay off your credit cards.
Normally, it would be better to pay off the credit cards first, rather than paying off the car. But, as the money was a gift for a specific purpose, you really don’t have that option
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