Sunday, February 1, 2009

That whole interest-free loan thing

Okay, I paid the government way too much in taxes last year.  (Oh well; they probably needed it anyway.)  This being the first year of owning my own home, buying a car, and actually getting to deduct charitable donations, I wasn't sure what to expect.  My expectations were incorrect.  On the plus side, I'm now expecting several thousand dollars any day now.

It occurred to me that my refund check should be roughly the same amount as what's remaining on my car loan.  Then it occurred to me that the interest rate on my car loan is basically the same as my credit card rate.  It doesn't really matter which one I pay off sooner—the difference in total interest paid would be like two dollars.  Actually, it'd probably be more convenient to just pay the minimum on my credit card, pay off the car entirely as soon as possible, and not have to make two payments each month.

1 comment:

Travis said...

I increased the number of allowances on my W-4 from 2 to 6 to hopefully prevent this from happening again.