| Question |
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Is it better to pay off credit card debt or a 2nd mortgage first?
For example sake, say a person has $10,000 to either:
1) pay off a $10,000 balance on a 6% credit card
or
2) pay $10,000 down on a 7% variable rate 2nd mortgage with a $30,000 balance.
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| By
Andy |
Posted on
02/06/10 Total Answers
7 |
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| Answers- |
| Always the higher interest loan. No one has a 6% credit card |
| Answer by :
Age of Reason On Date
2010-02-06 09:05:24 |
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| Credit card debt is considered revolving credit.
Extremely harmful to your credit rating.
A mortgage is an installment loan.
Pay off the credit card debt, and pay it in full each month after that.
Do not close your credit card account after pay off - this will lower your credit.
Just leave it open and don't use it - or continue using it for small things and pay in full.
Your second mtg may be tax deductible.
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| Answer by :
Judy On Date
2010-02-06 09:06:44 |
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| I would definitely say that it's better to pay off the credit card. Yes, you have a higher variable rate on the mortgage -- however, remember the tax advantages (what you can itemize yearly) for the mortgage vs. the credit card. Free up that debt. |
| Answer by :
Yousaidit On Date
2010-02-06 09:06:57 |
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| Get rid of the credit card debt, then get rid of the credit cards.
Plastic loan sharks is all they are.
You must have had that card for a long time to have a 6% interest. Most are approaching 20% interest now. I'd still get rid of the plastic. I Don't have cards any more and never will again.
The lobbyists have bought all the senators and congressmen so they can charge usury rates and extortion fees and charges to the public, so I don't ever want to see another credit card again.
It's a sad day for America, but there you have it. |
| Answer by :
intheleast On Date
2010-02-06 09:07:59 |
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| What I would do is, take out a line of credit using your house as collateral and pay both off at once. Right now to get a line of credit the interest rate is slightly above prime.
We just did it and the rate is .05 above prime.
Just make sure not to run your credit card up again to where you can't manage it. This way you can pay down your line of credit faster with less interest. |
| Answer by :
unknown friend On Date
2010-02-06 09:08:09 |
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| Credit card debt is at a compound interest rate which is bad. However a 30k balance on a second for many, many years that could go to 10% plus can also be bad. I would opt for paying off the credit card and then send a little extra each month on the 2nd |
| Answer by :
James On Date
2010-02-06 09:10:49 |
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| Which ever you owe less on...so the credit card. Key is to eliminate unnecessary monthly bills. Mortgage/house is necessary. Once you pay off cc cut them all up or only have 1 at a very low max at $500 or something. |
| Answer by :
LoveMyNewLife On Date
2010-02-06 09:30:02 |
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