You have a stack of bills in front of you and you may not be able to pay them all. Which debts are the most important?
Many people make the mistake of paying their credit cards before their other debts. I argue that credit cards fall very low on the list of debt priorities, especially if you have a mortgage and auto loan. Learn why your mortgage should top your list of debt obligations: How to Prioritize Your Debt Payments
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Hi,
I have to disagree. I got a credit card at http://pre-authorized.com and was told the interest rate was 11.9% which isnt too bad, but if I miss a payment the interest goes up to 18.something%. I want to make sure that dosent happen, so paying my credit card bill ranks higher than my car payment.
I agree with Matt. If you miss a payment or have a late payment, not only do they charge you a late fee( mine is $39) but they raise your charges. Mine will go up to 29.something. Can’t have that. The card I use for tires and automotive things is Sears. My charge is 24 something which they won’t lower at all. It’s a monopoly. As soon as I get it paid off, it goes into the trash. Warned my adult kids about it too. I’ll eat lots of beans before I’m late.
But if you are really low on money by not paying a secured loan like your house or car, they can be repossed. Credit cards are not secured. If by eating beans to make those credit card payments works for you, good for you. But if you are not able to pay your house, car and credit cards I would still pay my house and car first. I want to keep the roof over my head.
In my opinion, it depends on whether you have enough money to cover your obligations.
If you do, then you should definitely pay off your credit card and auto loan debts before making extra payments on your mortgage.
If you are in money trouble, then by all means make your mortgage payment before the others. You can then keep your home and often time get credit card late fees and excess interest waved.