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Pay down debt or have an amazing trip?

Discussion in 'Non-Vegas Chat' started by Jade88, Aug 27, 2013.

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  1. Jade88

    Jade88 High-Roller

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    I know most of you will think i am crazy not to take my hubby's bonus to Vegas, but i also want to pay down some of our C.C. Cards. With our trip right around the corner it kills me to not put the whole thing into savings and pay some debt with what we have when we go home. Has anyone done this? and what was your results? any regrets?
     
  2. ken2v

    ken2v This Space For Rent

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    Put me down most definitely in the other-than-most camp. If you're carrying balances with CC interest rates ...
     
  3. STPFan

    STPFan Low-Roller

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    I am thinking that asking a bunch of degenerate gamblers for financial advice might not yield a desired financial result. (unless you want that amazing trip) :evillaugh

    Anyway I am a fan of having as little debt as possible. So I say save it.
     
  4. Sdebruyne

    Sdebruyne Low-Roller

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    I say pay down your credit cards. If you are carrying balances, then the interest you will save by paying down the debt will most likely be a better return on your money. A guaranteed win.

    But then again, it's your money. :peace:
     
  5. Keyser Soze

    Keyser Soze Low-Roller

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    I live the lifestyle of the millionaire next door- live well below my means. No debt, ever.
     
  6. MNVegasgal

    MNVegasgal Low-Roller

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    I would use a little as a reward.. 25% - and put the 75% toward the debt. You can feel like you received a little fun out of the Bonus.. but used 75% of it in the logical grown up way. Maybe the 25% will grow and you can put more toward the debt.. but chances are the 25% will be gone, and that will feel better in the end than losing 100% of it.
     
  7. Scot

    Scot Low-Roller

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    Pay off the debt. You'll be able to have many amazing trips with all the money you are not paying towards your debt when it's paid off.
     
  8. thecarve

    thecarve Misanthrope

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    I hate that I have to join the wet blanket parade, but The Bard of Central Cali sums up my thoughts succinctly:

    Trust me, your next Veags trip will feel that much better for your diligence.


    Best of luck with whatever decision you come to. :thumbsup:
     
  9. Auggie

    Auggie Dovahkiin

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    I would look at this from the angle of: what is your ability to pay off your debt normally, like outside of this bonus?

    Just as an example: if your credit card debt was $2000 and the bonus was $2000...

    If the $2000 is something you can, and probably will, pay off in another one or two months if you didn't put the bonus to it: then I would probably use the bonus for the Vegas trip and then pay off the credit card with any money that comes home and then try to get it paid off in 1-2 months.

    If the $2000 is a debt thats one of those things where if you don't pay it off now you'll probably end up carrying it for a full year, IE: you'll probably be paying it off just enough each month to cover the interest and maybe a few bucks more... then in that case I would pay off the credit card debt.

    The main thing is that the interest can really add up to where if you carry a credit card debt for a full year at 20% on $2000 thats $400 you would have had in your pocket otherwise... or basically, whatever the interest is until you pay that money off is the effective "fee" you are charging yourself (with the money going to the CC company) to borrow this money now and pay it off later. At 20% "borrowing" $2000 from yourself where you are going to pay the credit card off in a month or two is going to only be about $33 a month, thats not too bad, at least compared to paying $400 over the course of a year to borrow the money from yourself now...
     
  10. topcard

    topcard Older than the Stardust!

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    Five years ago, I had almost $90K in debt (not counting my mortgage).
    Most of it was college debt for my two boys, but a good chunk of it was credit-card debt that I'd been carrying for literally decades.

    Smartest 'financial' thing I've ever done was to schedule a planned pay-down of all of my debt, one company/debt at a time. As each smaller one was paid-off, the entire amount I was using to aggressively pay down that one, got allocated to the next-smaller one. And so on...and so on. The beauty of that is, as you begin to attack the larger balances, you're paying significantly more on them because of the cumulative build-up of cash designated for debt. (You continue to make minimum payments on all but the current one you're working to eliminate).
    I've reached the point now where I have no debt except for my mortgage - and I'm allocating what I used to pay on debt to extra principal-payments on the mortgage.
    Amazingly, I'll have my mortgage paid off by the end of 2015 - 13 years early on a 20 year mortgage (re-fi).

    So - to your question - I would pay down your debt, but start budgeting regularly for Vegas trips.
    I use direct deposit into my credit union account...out-of-sight, out-of-mind. I pay no bills from that account, it has no ATM and no check-writing.
    The money builds "in the background". When I think I may have enough for Vegas, I call and check my balance. When I want the money, I have them mail me a draft for the amount I want the Vegas bankroll to be.
    When I come back, all of the cash I have with me goes right back into that account...and sometimes, that's more than I initially took out.

    I am a true proponent of living debt-free, if it's at all possible.
    If that means postponing a Vegas trip for year, then that's what I think you should do.
     
    Seems like forever from now, but the flights are booked, so it counts!
  11. Kickin

    Kickin Flea

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    Credit card debt is just about the worst kind of debt you can every carry. I think you should undoubtedly do whatever you can to get rid of it before indulging in anything at all. Take this from someone who trades debt as a profession!
     
  12. lotso-bear

    lotso-bear VIP Whale

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    Personally, I think student loan debt is worse. :eek:

    I agree with everyone else about paying off the debt. Not only does it lower your debt amount, but your credit score might go up because of it! It's always nice to have a low credit utilization % as well if you're planning on financing something in the near future.
     
  13. USCHawks

    USCHawks High-Roller

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    Do you listen to Dave Ramsey?

    As to the original question...I'd use it to pay off the debt. I got into a bit of a mess shortly after high school and since then have tried my hardest to not have any debt.
     
  14. Kickin

    Kickin Flea

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    Depends on the type. Student loan debt is the only debt I have right now and I can pay it all off at once in ease, but I locked it in at 75 bps during the zero rate environment so I'd literally be losing money by paying it off. And at least you're expecting (hopefully) some ROI on student loans, that's not the case with CC debt. Plus if shit hits the fan or if you decide to go back to school its much easier getting deferments on student loan payments but you'll never get that on CC debt.
     
  15. HoyaHeel

    HoyaHeel Grammar Police & Admin

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    Piling on the "pay down debt" bandwagon.:peace: After some credit card debt and way too much student loan debt, I'm debt free (other than the mortgage, and we're 2/3 through that) We don't spend money if we can't pay the credit card off that month. And we have a vacation savings account - we save for the trips we want.

    (and when I finished paying off my last loan this year - my car loan - all the $$ started going into my savings account to pay for repairs and to save a deposit for the next car:ssst:)
     
  16. topcard

    topcard Older than the Stardust!

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    The concept I gathered from him... but I modified it somewhat because of the math.
    (I attacked higher interest-rate debt first, regardless of size, unless the smaller debt was within a point or so of the higher debt interest rate.)

    Best example of that was a credit card debt that I had which was one the smaller ones, but it carried a 3.9% fixed-for-life rate.

    That was actually the last one that I cleared...and I did it in just two payments.
    All of my other debts ranged from 8% all the way up to 16%. (Damned "parent loans"!)
     
    Seems like forever from now, but the flights are booked, so it counts!
  17. mikenhe

    mikenhe VIP Whale

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    pay off your debt is a very sensible idea and has much merit.

    However if it was an unexpected bonus I would take some of it to vegas and have the most amazing (show/hotel room for a couple of nights/ meal/ insert your own - I can't afford that item).
    as long as most of it pays down the debt and you keep paying it down.... then have a little fun along the way.


    but as someone said - you are on a vegas message board asking if you should do something sensible.....
     
  18. donfairplay

    donfairplay Low-Roller

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    I've not done this, but I follow credit card/financial forums.

    If you're in a situation with cc debt spread across multiple credit cards...
    try to pile all excess income to pay off a single card, and look for promo rate 0% 2.9% (or w/e) balance transfer checks after 30-60 days (read the fine print on fees, too). Transfer debt from other cards to the promo rate. Then start paying off whatever you can - promo or regular rate debt.

    It's a bit of a game and maybe not for everyone. But you'll be on the road to debt freedom. There are many roads to Dublin.
     
  19. USCHawks

    USCHawks High-Roller

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    I was just curious. I used to listen to him once in a while years ago and your explanation sounded quite similar to his basic principles to paying off debt.
     
  20. shifter

    shifter Degenerate Gambler

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    it's impossible to tell you exactly what to do as we have no idea of your full financial picture. the obvious answer is that taking money to Vegas you can't afford to lose is a recipe for disaster. however, it is a good idea to take a small portion of found money and do something fun with it. you can't have all work and no play.
     
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