Which should I pay with tax return? ?

I have 3 credit cards totaling $12,000 in debt, with one being $8000.  I also pay $300 a month for my kids' taekwondo class, but I could pay that off with one $4000 payment and have that extra $300 a month.  

I have an opportunity to buy the home I have rented for the last 15 years for $50,000, but with my CC debt and student loan, that brings me to $2000 debt more than I make a year in income and disqualifies me, at this time, for a mortgage.  

Should I pay down the CC with my tax return($5000) or, should I pay off the Taekwondo tuition and use that $300 a month to pay down CC? 

Update:

The nastiness isn't necessary.  If you can't answer the question without being nasty, don't bother.   

8 Answers

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  • 1 month ago
    Favourite answer

    Throw it all at your credit card debt that has the highest interest rate.  

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  • Anonymous
    1 month ago

    Why are your kids in a taekwondo class at a cost of $300 per month when you can't afford to buy a house and keep your credit cards paid down.  You could be putting that $300 per month on your credit cards and get out of debt sooner.  

    Take the kids out of the class - use the tax refund to pay off as much credit card debt as  you can and then buy the house.

    • Mommabeans1 month agoReport

      Not that it's any of your business, but Because they have a trauma history and need an outlet.  

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  • 1 month ago

    I would WITHDRAW the kid from Tae Kwon Do until the credit cards were paid off. I would also change my tax withholding so I had the extra $416 per month in my paycheck.

    Note The $5000 you OVERPAID is a refund. Your return is what you sent in to claim the refund.

    • Mommabeans1 month agoReport

      No ****, sherlock.   Semantics.   

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  • Eva
    Lv 7
    1 month ago

    Pay down the credit card. It will save you a lot in interest and the tuition doesn't show up on your credit report.

    • Mommabeans1 month agoReport

      I didn't say the tuition did. 

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  • Anonymous
    1 month ago

    The first thing you should do is adjust your tax withholding so you're not giving the Government a $5,000 interest free loan. Then you pay off your debts; taekwondo class is not a debt.

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  • 1 month ago

    If you really want to buy the place you are living then I'd first off suggest going to see another mortgage broker (especially if it was a bank that told you that you don't qualify).  If you could buy the place you are renting, that might have you far more on a month to month basis, and though things might be really tight for awhile, it might be the best decision in the long run.

    If you just can't swing buying the place you live, then I'd pay off the credit card first (you could pay off the one with the 4k balance and that's one less payment too) and just keep making the Taekwondo payments as they come up, however if you are getting a large rebate by paying the TKD and you are sure your kid is going to stick with it, then maybe that would be the smarter option. Hard for me to say for sure without more detail.

    • Mommabeans1 month agoReport

      It's the TKD that would be the 4 thousand one time payment.     

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  • Sandy
    Lv 7
    1 month ago

    pay $10,000 toward CC debt. try to get a lower or zero interest rate on the rest of the CC debt. pay half the lessons, $2,000. then your credit score will substantially increase to the point where you can get a good interest rate for a house. don't worry about the student loan. you'll be paying that until you die. 

    • Mommabeans1 month agoReport

      I'm not worried about the student loan, except the monthly payment for that is counted towards the DTIR.    

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  • Anonymous
    1 month ago

    It doesn't really matter because no one is going to give you a mortgage any time in the near future.   You're living above your means. 

    If you really want the house, figure out how to pay for it in cash.  It's only 50k.    Any reasonably solvent person should be able to come up with that.    Don't you have any savings or investments? 

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