sure, you could net about 1% interest from not paying the card off and putting the cash in HSBC or something, but I’m sure you could make more money by dumping the CC and moving those payments elsewhere.

I’m suprised to hear that they were paying above the minimum on both cards. They could have saved a lot more interest paying the minimum on the low % card and applying the rest to the high interest card.

If we were talking about a mortgage– secured, tax-advantaged, not prone to extraordinary rate hikes– then I would agree with your assessment, and I am opposed to paying off a low-rate mortgage early. But for a credit card, unless you’re damn near zero percent, I would much rather pay it off. EMF shows that the quantitative argument doesn’t fall much in favor keeping the debt either.

If your answer to (1) is “yes”, please provide a link.

If your answer to (2) is “more”, show me the numbers.

Since the answer to (1) is “no”, and the answer to (2) is “less” for most employed people, the advice to pay off both cards is not “very odd” nor even just plain “odd”.

3.99% is a fabulous rate, pay if off as slowly as possible. Nip the other one in the bud and put the money to pay off the citi card into HSBC or ING or Emigrant where you can earn 5%+.

I’d add that depending on just how large your windfall is, you might want to be very cautious about talking about it too openly with friends and family, or making any outward changes in lifestyle. If there is one thing I’ve learned, its that money is the last great taboo. People have a lot of loaded emotional issues when it comes to money and how they perceive people with money. If you suddenly have a lot more money than your friends & family, they will start looking at you differently, and I don’t mean that as a positive.

We’re all human, and envy, jealousy, resentment, and judgemental behavior are natural. I’ll admit that I have felt quite envious of friends who have received or stand to receive inheritances. It’s my hang-up – it’s not like I need an inheritance to meet any of my fin’l goals. I’m happy for them, but since I don’t think I’ll ever inherit much of anything, I feel a twing of envy, no matter how much I appreciate my own good fortune. Thankfully, that emotion is in check and has never endangered any relationship.

My wife and I were up until 2am last night discussing how the growing divide in wealth between us and many of our friends and relatives has been creating tension and strain on long-time relationships. She is starting to realize that we have to be a lot more careful about what we say in conversation that might ignite jealousy.

We’ve concluded that we don’t even have to do or say anything to warrant resentment – the resentment will find us no matter what because some people just assume that if you become well off, you’ll naturally become an a-hole. So, its always incumbent on us to try to avoid being stereotyped in that way.

Money can also create tension within a marriage or committed relationship. Did the windfall come to only one of you? Does that mean that the recipient has more say in how to handle the money? Does the money go into a joint account? How does the money affect your estate plan? Should it be willed to one side of the family or another? Should it be shared with other family members? Etc.

The one thing that most people don’t really get about wealth is that it doesn’t make life simpler – it makes it more complex. Much, much more complex. And therefore, you have to expend a lot of time and energy thinking about how to manage it and the emotional issues that come with it.

Gaming: Click on the “EMF” link above to be taken to my blog. In the post there, I cut-and-pasted exactly what the FICO score service had to say about improving my credit score.

One thing I’ve noticed from getting my free annual credit report from http://www.annualcreditreport.com/ (and not the other site advertised on TV with “free” in the URL instead of “annual”) is that they all don’t get reported to at the same time. That’s because my credit balance history has different figures for the same month. So as far as timing of payments goes, all I can say is that sooner is better than later.

If you are about to get a mortgage, you should get copies of your credit reports and correct any errors. Actually, you should be doing this on a routine basis anyway. I spread mine out so I do one of the three agencies every 4 months. And you may want to purchase FICO scores from all three agencies, to verify that any steps you’ve taken to improve your score have actually been processed before you apply for a mortgage.

As for the timing of it within the billing cycle, really I don’t see this as being an issue if you’re not trying to get new credit immediately or at some particular date (a mortgage app or something). I’d say, pay it all off ASAP to avoid more interest being charged.

As for the mortgage vs. investment issue, JLP has covered this thoroughly in the past and the general conclusion is not to pay off your mortgage early if it’s got a reasonable interest rate. EMF does provide an interesting scenario above with the PMI etc., and that is something additional to consider. But wait several months before you try to re-finance, if you want to go that route. One FICO/credit-report timing issue that I know for sure is that credit card companies and other lenders sometimes take their sweet time in keeping the credit bureaus up to date. I’ve seen accounts on my credit report 2 to 3 months out of date.