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Subject:  Re: large balance vs. small balance ?'s Date:  5/27/2001  7:54 AM
Author:  aja91 Number:  72778 of 312185

1. What accounts should I pay off first? I know theoretically speaking it's more Foolish to pay off the account with the highest interest. Or should I make aggressive payments on the accounts that have low balances?????

First, is there any way you can return the machine to Leasecomm? Before you start making any additional payments on this, look in to this possibility.

You have two credit cards with pretty low rates (10% and 7%). Can you transfer the balance on the MBNA/Gateway card over to those?

OK, assuming after this that you've not gotten rid of the Leasecomm and MBNA/Gateway debts due to return or transfer, I'd pay everything in this order:

MBNA/Gateway 26.9% $1,600
CC#1 10.0% $1,000
CC#2 7.0% $1,000
Leasecomm 0.0% $4,000

Scrape as much extra money as you can each month and apply it all toward the MBNA card. Pay only minimums on the others. Then take that "extra" money plus the MBNA minimum payment and start applying it toward the next card. Keep snowballing until you pay everything off.

Since you bring it up: the decision on whether to pay off debts based on balance owed vs. interest rate is more based on the personality of the person paying. If you need to see the progress of "quick wins" in order to maintain the discipine to keep at it, go after the small balances first. If it doesn't matter, and nothing will hold you back, then financially it is better to pay the high rate cards first.

2. Since I feel that there is no legitimate reason for my credit counseling agency for not handling my high interest line of credit account. (MBNA, gateway) Should I consider consulting a different agency for that one account???

You are looking to the agency to provide you with better repayment terms than you could get on your own, and hopefully to prevent harassing phone calls if you have fallen behind on payments. If you've gotten the rates lowered on your cards of your own initiative, and the agency isn't getting you better payments, I'd say you don't need them at all. Thoughts from others on this?

Hope this helps.
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