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Just realized I was paying off the wrong debt for 5 years
I had a credit card with $4,200 on it at 22% APR and a student loan with $8,000 at 4%. For five years I threw every extra dollar at the student loan because it was bigger and felt like a monster. Then my buddy Mike from work showed me his spreadsheet where he was killing a store card at 29% first. I did the math on a napkin at lunch and almost choked on my sandwich. That $4,200 card had cost me over $2,000 in interest because I ignored it. All those years I thought I was being responsible but I was just going by gut feeling. Anybody else ever target the wrong debt just because it felt scarier?
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joseph_green135d agoMost Upvoted
Jesus Christ, I felt that one in my gut. Honestly, I did the exact same thing with a medical bill and a car loan a few years back. The medical bill was smaller but the interest was way higher, and I just threw money at the car loan because the number was bigger. @ruby_bell47 is right about the math too, that card was bleeding you dry the whole time. I remember staring at my own napkin math and feeling like an absolute idiot for ignoring the obvious. Ngl, gut feelings are good for picking a lunch spot, not for deciding where your money goes. At least you finally caught it, some people never do.
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ruby_bell475d ago
Oh man, that's rough but also the math doesn't quite work like that unless you were only paying the minimum on the card. If you were throwing "every extra dollar" at the student loan, the card was still racking up interest on the full $4,200 balance the whole time so you're probably undercounting what it actually cost you.
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