Pay off credit card or student loan?

Discussion in 'Mayberry Lounge' started by Fedorgasm, Dec 30, 2016.

  1. Fedorgasm

    Fedorgasm Silver Belt

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    So my company reimburses you for college classes. I just got my reimbursement check for this past semester, so I can pay off my student loan or I can pay off 30% of my credit card debt.

    I think it's probably a no-brainer that I should pay off some of the credit card since the interest rate is much higher than the student loan. But then I heard that you can never get away from a student loan, even if you file bankruptcy.

    Now I'm not likely to file bankruptcy anytime soon, but finding that out did make me start to wonder if there were any other disadvantages to paying off the credit card instead of the student loan.

    So as with every life decision, I thought the best thing to do was to ask a bunch of dudes that watch UFC.
     
  2. DIABOLUS

    DIABOLUS Banned Banned

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    I'd pay the student loan off and permanently get rid of it. You can pay down the credit card as quickly or slowly as you like, or file for bankruptcy and wait however long it takes for it to come off your record (not that I'm advocating going that route).

    Throwing the money at your credit card still leaves you with two outstanding debts instead of just one.
     
  3. Luger

    Luger Rabbi of Platinum Nation Banned

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    Just avoid loans in general.
    I tend to do everything opposite of what the bankers want me to do.
     
    CerebralKnievel likes this.
  4. Cubo de Sangre

    Cubo de Sangre President of the War Room

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    Pay the higher interest credit card now and honor your student loan debt later.
     
    Cid, Goonerview, cmw43 and 4 others like this.
  5. bubbleboyjones

    bubbleboyjones Belt Purple

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    I'm not an expert in this since I never have debt but wouldn't the smartest thing would be to get rid of the 30% credit card debt asap. He's just pissing money away.
     
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  6. My name is

    My name is Shawn

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    I vote credit card. if you get in a tough spot you have the money on hand to use . I'm talking about real tough spot though . the student loan just pay on as much as you can as fast as you can.
     
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  7. BobSappIsMyDad

    BobSappIsMyDad Handsome Boy Graduate

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    I'd pay off the student loan. I had this economy teacher in high school who was in his 40s and was still paying off his student loan and later he got fired cause he stole money from the school.
     
  8. coopdro

    coopdro =-_ Damn Milkshake _-=

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    Concur on the paying off the highest APR debt you have, then have better money management to ensure you don't just back fill what you've just paid off.

    If you're allowing the thought of a future involving bankruptcy as a potential solution, you probably have bigger concerns in the long haul.
     
  9. dabrian

    dabrian Orange Belt

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    Pay off the credit card debt. If you can't afford to pay in full every month on the card you need to stop using it.
     
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  10. paratiddies

    paratiddies ( o Y o )

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    Pay your CC off ASAP and then never use it again unless you're able to pay in full each month (which it's safe to say you're not)
     
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  11. DIABOLUS

    DIABOLUS Banned Banned

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    You very well may be right. If his card debt is over 3x what all his student loans are, he must be in debt up to his eyeballs.

    I never charge anything on my card that I couldn't afford to buy outright. But if I want to soften the financial blow on the purchase, I put it on the card, pay 1/3 or 1/4 of the purchase immediately, and pay the rest down over just a few months. I get the expensive item I wanted now, didn't take a huge hit all at once, and the bank doesn't make too much in interest since I paid it down with accelerated payments.
     
  12. Iscariott

    Iscariott Green Belt

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    APR is the name of the game. Pay off whatever is highest first.
     
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  13. Fedorgasm

    Fedorgasm Silver Belt

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    More specifics for those who were asking.

    The credit card debt is around 10k with an interest rate of I think 19%

    The student loan I don't recall the interest rate and I can't look it up right now but I'd guess it's between 4% and 7%. The student loan balance is 3,300 and I just got a lump sum 3,300 from my company.

    I'm not planning on filing bankruptcy. Not at all. I'm just considering it as a factor because you never know what will happen. I could lose my job or become disabled or whatever, who knows.

    I guess it comes down to the money I'll save on interest vs. the liklihood that I'll go bankrupt. The money I'll save is very real and tangible, and will definitely happen. The bankruptcy is very unlikely to happen. So I guess I'll go with paying off 30% of my credit card balance.

    Another benefit that I didn't think of is that I have to pay credit card payments every month, whereas I don't need to start paying the school loan until I graduate. So the urgency to get the school loan paid is even lower.

    Thanks sherbros. Sometimes I need to hear someone else say it before it makes sense.
     
  14. Vomit Inducing Brutality

    Vomit Inducing Brutality Depraved Individual Platinum Member

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    Neither.

    Live on the edge.
     
  15. Oblivian

    Oblivian Aging Platinum Member

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    Credit card for sure given your last statement that you don't even have to start paying on the student loan yet.
     
  16. SMEAC

    SMEAC Walt Kowalski

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    Pay down the CC

    Student loans are for life, but they aren't really held against you credit wise if you aren't in default.
     
  17. boingyman

    boingyman If can, can. If no can, no can.

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    You already made the right decision with your last reply. If anything else I would further find ways to pay off ALL of your CC debt asap. It all starts with budgeting and if necessarily and feasible find other streams of income to accelerate the process. Also sacrifices will likely need to be made if you want to be serious about cleaning up your debt. At the end it's up to you though.
     
  18. djacobox372

    djacobox372 Gold Belt

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    I can't believe there are people who suggest paying off a lower interest loan first. WTF?

    Rules to live buy: Always pay off highest interest loans first, and never rush to pay off any loan with a rate lower than you can earn by investing the $$ elsewhere (5% or less).

    If your student loan is just 4%, then just pay the minimum. You can make over 4% by putting the extra $$ in other investments.
     
  19. wlu.29

    wlu.29 Black Belt

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    It's a no brainer pay off the credit card
     
    j123 likes this.
  20. fightingrabbit

    fightingrabbit Banned Banned

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    I would just try to fake my own death. But whatever, it's your life.
     
    Sanosuke and Thunderflash500 like this.

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