Should I pay off my credit cards or my auto loan first?
I recently inherited $30,000. I want to get completely out of debt, but I'm not sure what to pay off first.
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Answered on Apr 27, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
“First off, set aside some money (maybe $1,000 to $5,000) for an emergency fund.
After that, the general rule is to pay whatever debt has the highest interest rate. This will most likely be your credit card debt.
If you have money left over, you can put it toward your car loan or invest it in something safe (such as bonds or mutual funds). In this manner, you can get rid of high-interest debt first and lower your interest payments overall.”
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