So I think I know the answer, but want to get a smarter audience opinion...

I have a financial decision I can make...

1--We are (really) thinking about selling the toy hauler because the motorcycles are gone and we use the thing maybe one or twice a year. Payment is ~$300 a month; maybe slightly less. I have about $4-7K negative equity in the trailer. I have the cash on hand to make up the equity without touching any other assets or going in debt to cover the negative for the sale.

2--We have a credit card with about a $13K balance. Minimum payment is ~$300 a month, but you know what the min payment on a credit card does for ya! However, this card has a sub 8% interest rate; excellent for a credit card. I can also pay this off with cash on hand; no debt and not have to dig into other assets to do so.

One other point to highlight...the trailer is a tax write-off every year.

I'm fairly certain option 2 is the way to go, but wanted a second opinion. Yes, I understand option 2 would be the best as long as you don't run it up again

 

pay off the credit card.

rent the trailer out to make income.

 

I've gotten to the point that I cannot stand having debt. Cant really advise you either way but I will say that having 13 grand in credit card debt isn't good at all. One thing at a time is my motto. Buy something and pay it off. When you get older if you've managed to put a few bucks away you'll be extremely glad you did it.

 

You will need commercial liability insurance if you rent it out, = EXPENSIVE.

 

How big is the tax write off and what's the APR on the trailer?

Since I don't know the details would this work? Pay off the CC then move the trailer payment to it. If the CC has a lower APR and you can keep the tax break it's a win-win. Plus most cards have a 6-12 interest grace period on balance transfers.

 

what is interest rate on trailer?

are you paying to store it?, insure it?


if you pay off the credit card debt, are you good enough to not run it up again and what is the plan to not get in debt again.


i would get rid of the trailer. it will do nothing but lose value. every time you see it you will be reminded of the money owed and the decreased value.

use the $300 a month to pay down the credit card

if you have $13k to pay off card. then you still have a negative value on the trailer and you still owe the payment.

if you sale the trailer you use say $6k to get rid of it. put the other $7k on the card debt, now you have $6k of debt. take the trailer paymet and the minimum payment and you pay $600 a month, in a year, no trialer, no debt.
$600 free a month.

that trailer is just an anchor around your neck, stop the bleeding, quit throwing good money after bad debt. the day it is gone you will feel a hugh pressure release.

 

Yea, I know. Not a line of defense, but I can honestly say this is our only credit card/line of credit type debt. And there's an unfortunate reason it eneded up that way...a story better told over beer. But life being what it is, eso sí que es!

 

 

I will volunteer to hold onto the cash assets until you reach your decision

 

X2