I have my budget planned out until March of 2004. It was my goal to pay off what started at 24k in debt on July 2001, 2 years and 8 months later. On December of this year I would have paid off the student loan and the open CC which would leave me at $3500 in debt. $1500 of that is at no interest until August 2004 and $2000 is at no interest $20/month fixed plan (medical bill that didn't get to collections). So does it make sense to pay the last $3500 by March 2004 or should I pay the $1500 off by August of 2004 and the $2000 more slowly? The way I'm budgeted now includes ONLY the necessities - what my monthly bills are and car registration ($300 - May) and so forth. I do have budgeted some $$$ for DVDs for the rest of this year (that's the one thing I've always done - pay off the debt but also have some fun). If I paid it off by August - or heck even by July - the 3rd year anniversary - that would allow me some clothes, movie tickets, dinner out now and then. I'm fixated on March because it's the earliest I can pay it off if I forego everything else and it's just to be able to say I am debt free - but does it make sense to sacrifice everything else? I could also not do overtime for a few months until November and December if I had some cash on hand - I've done over 330 hours so far this year and 300+ hours last year. I'm writing a book so the extra time would help. So am I missing the forest for the trees? BTW I make 28k a year, which translates to $1000 a month after necessities (including cell phone, gas, food, rent, car insurance, etc).
I have similar situation - $4000 in cc repayment plan @ %0 for 2 years, apx. $100 due each month. Rather than paying more each month or paying it all off I'm putting extra into my savings/emergency fund. When the time is up I'll pay it off or bal. xfer to some 0% deal (if they still exist in 2004.) 0% interest is like using somebody else's money. Keep it as long as you can unless there is some specific reason to pay and close the account. For you, $20/mo for eight years is pretty good terms. Knowing I can pay off the account but have chosen not to at this time is much different than having my back against the wall! My 0 cents worth.
With any ZERO interest offer, pay only the minimum payment required UNTIL THE OFFER EXPIRES. That medical bill can't get any lower, so I would just stick to your $20 per month plan. BEST PLAN: Save all extra money in an interest bearing account and accumulate interest for yourself. This way, when the ZERO offer expires you'll have plenty of money in your savings account to pay off any remaining balance.
