Should you pay off credit cards or a car loan first?
"My car loan has a 7.25% interest rate and a $15,000 balance. I also have about $12,000 in credit card debt with varying interest rates, but all are 14% or higher.
Should I pay off the car loan or the credit cards first?"
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Answered on Jun 17, 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.
“As a general guideline, you should always pay off higher-interest debt first. In this case, this will almost always be your credit cards, unless you were to have an exorbitant interest rate on your car loan.
If you’re worried about your current car loan, you might want to consider refinancing your vehicle to save some money while you also pay off your credit card debt.
And, if you continuously find yourself in debt, you can always consider debt counseling.”
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