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93195 t1_j2f42y7 wrote

Use your cash to pay off what you can.

Then put yourself on a spending diet, don’t buy anything you don’t need to survive until the debt is gone.

While you’re doing that, consolidate the debt to as low of a rate as you can get. Ideally, a balance transfer card with a 0% promo rate. If you don’t qualify for those, while you dismissed the personal loan rates as “too high”, they’re still lower than the 25% you’re currently paying. So lower that rate. 0% if you can get it, but if you can’t, 18% is still less than 25%.

Regarding your $1600 in “savings”, you don’t have any savings. You have $5300 in debt. You have negative savings, and it doesn’t make sense to pay 25% interest while earning only 3%.

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Clean_Picture_8295 OP t1_j2f6h8j wrote

Just re-read your statement on the savings part - I recently started getting into personal finance, so now I understand to look at my finances from a business/net worth perspective. Thank you once again, I will use this information going forward.

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Clean_Picture_8295 OP t1_j2f5eeb wrote

Almost posted with my main account, oops, but I've been getting a lot of CC pre-approvals coming in the mail with 0% balance transfers. I didn't want to open another card but a good option to think about. Def have to cut spending down in order to max my monthly take home towards the debt. Also true about the loan, still considering this as my primary option, thank you for your advice!

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93195 t1_j2f5k3q wrote

0% trumps everything. Open the account, transfer your high interest debt, cut up the card.

On $5380 of debt at 25%, the first $113/mo is just interest. So if you pay $500, your debt goes down by $387. If it’s at 0% and you pay $500, your debt goes down the full $500. Which sounds better to you?

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Clean_Picture_8295 OP t1_j2f7335 wrote

For sure the second option - I'm going to look through the offers I received. Although, I am worried about not getting a high enough limit. Thank you for the comment!

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ahj3939 t1_j2f7a6b wrote

Main thing to look for is balance transfer fees. I haven't seen any with no fee since late 2019 or early 2020. These days it's either 3% or 5%.

Obviously you want the ones offering the lower 3% fee.

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