Where, oh where should this Discover payment go?
Last month, we used my PTO cash out to pay off the Discover Card. Now, we are approaching the 15th, and we need to make a big decision.
Well, maybe not THAT big, but WHERE do we put the Discover Card payment?
1. Best Buy- we have a balance that needs to be paid off in December. If we put the Discover Card payment toward this we will pay it off with LOTS of room to spare, and will need to revisit where to put the extra payment.
2. Student Loan- Nelnet, of course, which has a 6.55% APR. I am happy with the Mohela 3.8% APR for the time being. I have a LARGE balance on this loan. Yes, perhaps I was an idiot when I took out such large loans. But I did it, and I’m working on paying it back. My student loan is in a 10 year repayment plan, and I’m only about a year and half into that repayment. Even with the ‘extra’ payment, it will still take me at least 5 more years to pay it off. Talk about delayed gratification.
3. Land Mortgage- We originally signed a 5 year mortgage amortized over 20 years. So we have a large balance in this account. While we are making double payments it doesn’t feel like our equity is growing very quickly. We could throw this ‘extra’ amount toward this as well and maybe buy a little more equity into the land and save a little in interest too.
4. Savings- You can never have enough liquid money, can you? We could throw this ‘extra’ into our savings account, but at less than a percent interest earned on this money it seems like a huge waste.
5. Nebraska Furniture Mart- I will not even consider making additional payments toward this. We have 0% APR on this money, and it doesn’t make sense to me to put extra toward it. Our next promotional balances are up in August, September and October, 2012 and we may have a little extra to pay off at the end, but we definitely have that money in our savings account, and can pay it off in one lump sum. Even at under half a percent interest earned, it is better than 0%.
6. Student Loan- Mohela. Again I won’t even consider this, at 3.8% it is our lowest loan interest rate, and the interest is mostly tax deductible. I won’t mess with this loan until everything else is paid off. Also with a 3% interest rate reduction it definitely won’t take me the full 10 years to get this paid off.
I think I’m leaning toward putting the extra payment toward the Land for November, and then using it to finish paying off the Best Buy account in December. Then we can decide where it should go for 2012 (along with the Best Buy payment, and the Kubota payment.)