New here and a question

iVillage Member
Registered: 08-12-2008
New here and a question
Fri, 01-08-2010 - 1:35pm

New here and have a quick question-

We owe about 22k in credit card debt over 8 cards. I am using a site called powerpay which plays out different scenarios of paying down debt-each using the payment that you used to make to one card, and putting it towards the next card once that one is paid off (hope I explained that well!)

Anyway, 2 scenarios are "shortest term first" which reduces my time to pay off by 2 years, 5 months and saves me $3766 in interest. Another scenario is "Highest interest first" saving me the same amount of time, but like 3798 in interest, so like $30 extra savings

The reason I guess I am debating is 2 fold. One, I think it might make me feel better to use the lowest balance first because 4 of our credit cards will be paid off by April, and another in Sept leaving us only 3 large balance cards. The other method seems more equal payments, with not alot of cards being paid off quickly- and I dunno, mentally having fewer cards with balances seems appealing.

The other reason I am debating because eventually we would like to refinance our house and pay off the balances with equity from our home. Right now my credit is pretty crappy. I don't know what is going to help my credit more-paying off alot of cards, or paying off balances more equally-does anyone know? I have attached screen shots of the 2 scenarios to give you an idea. Opinions are appreciated.