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OK, I know I need to get a different vehicle soon and what better time to do it then at tax time? I am anticipating about $ 1,000 back and I was thinking of using it to assist in purchasing a vehicle, but then I got to thinking, “Would it be better to pay off $ 1,000 of the $ 1,400 in credit card debt i’m in or use it for the vehicle?” The credit score analyzer calculator said my score would be around 680 if I paid my credit cards down that much (compared to my current 647 score). Should I pay that towards credit cards or use it toward a vehicle. Either way, I am going to the bank to get a vehicle loan, so if I used that $ 1,000 toward a vehicle, that would be a $ 1,000 less I need to borrow. I am stuck on this one guys…any suggestions?

5 Thoughts on pay off credit cards or use with buying a car?
  1. Reply
    July 15, 2011 at 5:46 pm

    well… you can buy a car.. and keep your debt high… or pay off most of your debt.. get a better credit rating.. and then buy that car on credit.. which you can pay off as you go… your choice

  2. Reply
    July 15, 2011 at 6:34 pm

    If the interest rate on your credit card is more than the interest rate you’ll get on the auto loan, pay the credit card.

    Hope that helps!


    Slay the Greek Gods!

  3. Reply
    July 15, 2011 at 6:44 pm


    You’re probably paying 18-22% interest on those credit cards. They are costing you A LOT more money than the car loan would. Plus, paying the cards down would raise your credit score and therefore get a lower interest rate on your car loan, saving EVEN MORE money.

    Always pay off high-interest debt first. Otherwise you’re just throwing money away.

  4. Reply
    July 15, 2011 at 6:56 pm

    I would use the $ 1000 to pay off the credit card debt first as generally, credit card debts carry a higher interest rate. Besides, as you mentioned, this would increase your credit score, too. With a higher credit score, you might get a car loan with a lower interest rate as well. In general, a car loan from bank would have a lower interest rate than the interest rate from the credit card of the same bank. Thus, lower your credit card debt as soon as possible.

  5. Reply
    July 15, 2011 at 7:21 pm

    I go along with the other posters about getting rid of the credit card debt.
    You are going to have to finance the car regardless, but I would sure lean toward getting out of debt with the card, for sure.
    In the long run, you will save money if you do pay off the CC and improve your credit score in the process.

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