Should I Pay My Debt Off in Full Or Do It Monthly? – Dave

“Dear Steve,

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.

I have $5000 credit card debt on one card with 11.9% APR. This debt has hovered around the 4500 to 5000 amount for about a year, as I have been paying off the minimum monthly payment each month, but have been hit with fees.

My question is: I just received a $5000 bonus from work. Is it best (at least for my credit score) to just pay off the credit card debt all at once, or is it better to pay off the debt with the bonus check gradually (say $1000 a month)?


Dear Dave,

If you have at least $2,000 in a savings account to use as an emergency fund then just pay off the debt. If you don’t have an emergency fund then use $3,000 to pay down the debt and put $2,000 in savings.

Whatever the minimum monthly payment is this month, make that each month till the rest of the debt is paid. Don’t get addicted to minimum payment crack. It is not designed to get you out of debt.

Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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