Interest & Fees - trust the darned tools!

So my spouse and I are paying off 3 credit cards - a big reason why we're YNABers now.

 Two cards have the same interest rate and the third has a higher rate. We're deploying the "avalanche" method and it comes as a surprise to me that when I run a payoff calculator adding the current interest amount to the minimum payment card-by-card vs paying each card at their minimum and paying the sum-of-the-interest-of-all-cards against the highest interest card the payoff date doesn't change - the % applied to the principal sure changes but it does really seem to be 6 of 1, 1/2 dozen of another situation.

The key point is we need to focus on paying the statement minimum, the interest charges, and a big dose of extra money to get clear of the dreaded credit card debt. 

This is what I get for griping about the interest charges being a separate line in the Budget that sits there glaring at me for not funding it. 🤷‍♂️

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    • Khaki Storm
    • YNAB book topics online: https://support.youneedabudget.com/r/q5w48j
    • Khaki_Storm.1
    • 8 mths ago
    • Reported - view

    I've read about avalanche, but I'm still a snowball guy. 

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      • dakinemaui
      • dakinemaui
      • 8 mths ago
      • 2
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      Khaki Storm ideally you would arrange (via feeless transfers) to have the lowest balance on the highest rate card. Then avalanche and snowball are the same.

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      • Khaki Storm
      • YNAB book topics online: https://support.youneedabudget.com/r/q5w48j
      • Khaki_Storm.1
      • 8 mths ago
      • Reported - view

      dakinemaui that's a great idea for credit cards. 

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      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 8 mths ago
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      Khaki Storm I'm a no credit card debt ever again guy. 🙂

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      • Khaki Storm
      • YNAB book topics online: https://support.youneedabudget.com/r/q5w48j
      • Khaki_Storm.1
      • 8 mths ago
      • Reported - view

      Superbone I mean it's a good way to pay them off and keep them paid off.

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      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 8 mths ago
      • 3
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      Khaki Storm If you mean YNAB, then yes. Once you no longer have CC debt, there is no avalanche or snowball. Just a warm cabin with a nice fire.

      Like 3
  • Yes, it's primarily throwing money at debt that moves the payoff date.

    The point of funding the Interest category is so the Payoff Goal gives sensible answers. Additionally, ANYTHING budgeted toward the Payment category is progress. Thirdly, zero overspending is a good habit to develop.

    A real debt payoff calculator will be more accurate, but it's estimate will only be slightly earlier.

    Like 1
  • dakinemaui said:
    Thirdly, zero overspending is a good habit to develop.

     Oh I feel like that was firstly for us. YNAB for the flipping win on helping me mechanically see how to do it. It highlights that our /income/ is not the problem, it was our frivolous spending.

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