Good-bye Discover Card!

I was a lot more anxious about making such a large payment today- but I did it. I made the LAST payment to the Discover Card today!

Talk about exciting. We’ve been paying down a promotional balance transfer for three years! But at 1.9% interest it was kind of the last thing on our minds to pay off early. We have never actually made the minimum payment on it. I did a fancy financial computation and used the balance we transferred, plus the transfer fees, plus WHEN we wanted to have it paid off to compute what our monthly payment SHOULD be. We have stuck to that payment for three years.

We did debate whether we should pay off such a low interest rate item or pay toward a higher interest rate loan (like our mortgage or my student loan).

In the end, we decided to get rid of the credit card. We are actually getting rid of the credit card, instead of just throwing money at a $20,000 student loan. Yes, the student loan has a higher interest rate, and we would save more money over the life of the loan by paying it down.

However, sometimes you just need to see something gone completely from the monthly tally. Also, depending on my job situation, we can always defer the student loan but you can’t defer a credit card. Though we do have a smaller amount that could go to one of our higher interest rate items (mortgage or student loan is still being debated).

So, we are saying good-bye to the Discover Card and Hello to the next debate: where does the Discover Card monthly payment get applied to next? I guess we don’t have to decide on that until November, since that will be the first month we won’t be making a Discover Card payment.

Any ideas?