Friday, March 7, 2008
I would like to start off this post by saying - I always wondered how bloggers had enough information to write about to keep posting daily without running out of ideas, but now I totally get it. That being said, I got my federal tax refund back today! While it is only $1374.00 - that is going to make a dent in some debt that I have. Now, the big question??? What debt to I apply it to. I know that traditional logic says that I should apply it to credit card debt because it is at the highest interest rate, but I was thinking about applying it to my student loans. Here is my logic - I have a little over $107,000 worth of student loan debt. (You didn't read it wrong...$107,000). So, while it is at a lower interest rate, it still accrues more interest a month than my credit card debt (a little under $5000) because there is more principal. Also, I was thinking that if I didn't accelerate my student loan due date, then my student loan payment every month may decrease as a result and free up a little extra money each month to apply towards my credit card debt. What does everyone else think? Should I still apply it towards my credit card debt or actually go against traditional logic and apply it towards my student loan debt?