Question

What should I pay off first, $8000 in credit card bills, or $5000 in hospital bills?

I'm graduating this fall from college and I really want to get out of as much bad debt as I possibly can. I anticipate earning approximately $10000 at my summer job and I'm unsure of which debt to pay off. Should I completely pay off the credit card first, the hospital bills first, or a combination of both. Thanks for the help.

7 years ago - 18 answers

Best Answer

Chosen by Asker

Pay off the higher interest debt first, but still making the minimum payments on the rest. By doing this you will establish a good credit rating, or at least improve a bad one.

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7 years ago

Other Answers

Credit card debt probably has higher interest. Call the debtor whom controls the hospital debt and work out a payment plan to avoid interest. Make small but constant payments to stay on top of the game.

by fastcarceo25 - 7 years ago

DEFINITLY the credit card bills. Medical bills do not earn interest AND creditors are less likely to put any stock into your medical bills than your credit card bills. I would send your medical bills each like 20.00 a month but hit the credit cards hard. The faster you get rid of any interest bearing account, the more money you have freed up for other things.

by Mixed Family Mom - 7 years ago

Credit cards...they have interest rates, so you are saving money by paying them off first. Hospita bills usually do not have interest.

by pppmntgrl - 7 years ago

2/3 of the credit card and 1/3 of the hospital bill

by annie - 7 years ago

Make small payments on the medical bills and put all that you can on the credit cards. The credit cards will have a much higher interest and also reflect worse on your overall credit.

by KD - 7 years ago

Definitely the credit cards first. The hospital will be more patient and less likely to charge outrageous interest charges.

by queenblafalot - 7 years ago

Make suire you make th eminimum payments on both, Then pay off the one with the highest interest rate first. You will save more money that way.

by mummy1973 - 7 years ago

Set up to a payment plan with the hospital..about $100-$200 monthly payments (no interest). They will be happy to do this.

Pay off as much as you possibly can towards the credit card bill monthly..since they are charging you interest.

But leave a cushion of cash in your savigns account for emergencies that WILL pop up in life. So that way it doesn't knock you off your payment agreements. Good luck.

by lilpuppy6 - 7 years ago

Defiantely the credit cards. The interest you will be paying on them will increase what you owe by hundreds, possibly thousands if you pay them off slowly in small increments.

The hospital bills usually do not gain interest, and also I have heard several creditors state that any hospital or medical bills that negatively affect your credit do not necessarily count in some senarios. A lot of lenders will see medical bills as something you could not control (not punishing you for being sick) while credit card debt that is slowly paid off shows that you tend to spend far more than you can pay back.

Credit cards for sure.

by mistressmalice23 - 7 years ago

What did you do, who put you in the hospital??

Did you derserve it?????

You must be from the USA,

here in Canada they don't pay hospital bills

Maybe you should try to cum up here so u can see

for yourself

by Lisa L - 7 years ago

Follow these steps exactily!!!!


Baby Step One Save $1,000 to start an Emergency Fund

Baby Step Two Pay off all debt using the Debt Snowball List all debts from smallest to largest with the exception of your home. Make mimumim payments on all but the smallest and get it knocked out then you have more money to pay off the bigger debts.

Baby Step Three
Save Three to six months of expenses in your emergency fund savings account.

Baby Step Four.
Invest 15 percent of household income into Roth IRAs and pre-tax retirement

Baby Step Five.
College funding for children

Baby step Six
Pay off home early

Baby Step Seven:
Build wealth and give!
Invest in mutual funds and real estate

Go to Daveramsey.com for more wisdom.

by rossem - 7 years ago

I agree that you need to pay off the credit cards first but if you ignore the hospital bills they will send you to collections which will effect your credit score. so make a payment plan with the hospital and pay majority to the credit card

by mkys - 7 years ago

Call your credit card company and see if they will accept a lower payoff, perhaps principal only. If you communicate with them, they will work with you. That 8K could possibly end up being on 6K.
Work out an arrangement with the hospital, but don't neglect it.
And remember, pay yourself first from your income.

Good luck to you...

by lil90396 - 7 years ago

I am not sure if your credit card still active. If it is active then you can solve both problems in a matter of days. First pay of your card as card usually provide revolving credit. Once you had settled your card, use it to pay you hospital bills. It's that easy!

Option 2. If your card is not usable then, talk to to the credit card co for minimum amount, usually they agree. Remainder cash can be used to pay thehospital bills.

Option 3. Since you are confident of having 10k, I would suggest you apply for a new credit card against your cash placed in Fixed Deposit. Look for a bank which could grant you atleast 1.5 times more than your cash surety. Use the amount to pay your bill and old credit card. Also will be good as this time you could use the opportunity to build a good credit history with your new bank

by dfs raj - 7 years ago

Pay down the credit card bills - highest interest first - to 30% or less utilization. Then pay on hospital bills - try to negotiate to a lower number.

This will mean about $5600 paid to credit card bills and $4400 paid on hospital bills.

Logic: Out of the two choices, revolving credit is scrutinized more on your credit report in terms of your credit score. Getting rid of your highest interest first will take away a great monthly burden, then simply paying down to lower your utilization retains active credit on your report and demonstrates that you do not absolutely need extra credit if you find yourself applying for additional credit some day soon. If the hospital bills are already past due, then you may be able to negotiate down to that magic number (or less) anyway. Medical past dues are not scrutinized by lenders as much as revolving credit.

For more opinions, check other credit related message boards and discussion forums such as the ones below.

Source(s)

by yolandanichole - 7 years ago

Your credit card co. makes interrest on what you owe. if you pay your hospital bills like 20 dollars a month its ok. get rid of your credit bills a s a p

Source(s)

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by Michael L - 7 years ago