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What should we pay off with our tax return?

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Money Talk > Credit & Loans

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csquiggle
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What should we pay off with our tax return?  Reply with quote  

We got about $6000 back with our tax return. We currently have about $30k in credit card/personal loan debt, balances ranging from $2000 to $9000 , with interest on the lower balances of 5%, 8% and 14%. The larger balances are currently covered under 0% promos but those expire this year and then will be considerably higher at 20% or so. Our dilemma is, we have a vehicle we owe 19k on. Payments are $340 with 5.5% interest rate. Should we take about 4K and pay down the car to where someone will buy it and free up $340 to throw at other debts, or, throw all of it towards the cards to reduced those balances?
Post Sun Feb 26, 2017 12:49 am
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oldguy
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quote:
$6000 back with our tax return.


First I would go to your HR Depts and get your W4s fixed. That way you could have paid off $6000 of that debt about a year ago. (and avoided paying that 14% interest - $840).

I would keep the car loan, a colateralized loan at 5.5% is a keeper (unless you want a different car?)
I'd put all of the $6000 on the revolving loans, the 14% first.
Post Sun Feb 26, 2017 1:27 am
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James Dj
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Spend It On Something You Want  Reply with quote  

You saved all year, and now you’ve earned the right to splurge a little bit. Don’t feel guilty about using the extra cash for a summer vacation or to treat your family to a nice dinner. Just don’t get carried away – a $500 refund is no excuse for a $3,000 trip.
:)
Post Tue Feb 28, 2017 12:00 pm
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