# Credit card questions

1. Is there a way to optimize the credit card float and not have too much money "sitting around" waiting to pay a bill that will not be due for nearly two months (based on statement end date and due date)? Pre YNAB I would eyeball how much I had available for other debt (leaving a buffer in my checking account) but now that money is earmarked for the future "float CC" card payment. I don't want to incorrectly mess with how much I have "budgeted" to pay this CC because I like the way it automatically pulls the amount from the budgeted items into the planned payment. But it would be nice to be able to differentiate how much is due at the next payment vs. the next-next payment. Hope that makes sense.

2. Should I snowball my CC debt and pay off the smallest balances first, pay off the highest interest ones first, or set goals to pay them all off in 18 months (this is doable based on my projections)? Does is make much difference? Is it more psychological than mathematical?

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• #1 -- The location of your money (i.e., the account) has nothing to do with which category it is in. You can do exactly the same thing as you did before. The use of scheduled transactions and the running balance makes it easy to assess when you can move funds to a higher rate account or have to bring them back for a larger than normal outflow.

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• #2 -- totally up to you. The math says pay off the highest rate first, which works if you base decisions predominately on logic. However, lots of people need emotional "wins" to motivate/continue and would therefore want to attack the smaller balance first.

Personally, I'd arrange for the highest rate to have the lowest balance for the best of both worlds. Do this without fees via BUDGETED purchases on your lowest-rate card and reallocate from that card's Payment category to the highest-rate card's Payment category. (Leave enough in the Available to cover the minimum, of course.) Repeat with the second-lowest rate card once the lowest is maxed out, etc.

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• Thanks for all of the info. I actually closed my lower rate cards due to an identity theft a couple years ago - I wanted less accounts to have to keep track of. Probably a mistake, but, onward!

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• On the snowball, we are currently doing this for ourselves. If you can pay off the high rate first, it is a good thing. But the psychological should not be discounted either.

We had 4 CC with balances. We made a plan to pay them off in a specific order and tracked it on an excel sheet. There are lots of other options to track the debt payment as well. One thing I would recommend is to stay consistent. We pay an amount bi-weekly on pay day that is automatically pulled from the bank account. I control the number and timing so I can change if needed.

While we were in the initial stages of the snowball, we received notification that our LOC was reducing the interest rate. When we looked at the card, we also realized that it had enough space for the two lower balances and the interest would be lower. So, we transferred the balances and had two cards that were paid off (but not really). It did help us because we felt ahead. One of the cards we are cancelling and the other is our Paid in Full card now. So, I would recommend looking to see if there is any possibility of consolidating the cards as well to help with reduced interest and timing.

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• Thanks for the feedback. I know I could ask the CC company directly, but in general, do CCs allow you to transfer balances at the 0% interest rate for the entire introductory period, or do you have to do it right away when you open it? I got a new 0% card, but it has a low limit, so I'm wondering if I could pay off the \$3K I transferred to it, then transfer another \$3K, etc.

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• dakinemaui
• dakinemaui
• 11 mths ago
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Green Flute Things vary quite a bit, so you'll just have to ask your particular CC. If there is a transfer fee, it's likely you can do it multiple times. The problem is you'd also have to pay them multiple fees, making that a really bad idea to pay it off before the promotion period expires.

The idea is to maximize the time money is spent at 0%.

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• 11 mths agoLast active
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