Loans · Side-by-side plans
Should I pay off my credit card or my car loan first?
Short answer
Usually the credit card. Sending the extra money there first saves about $1,626 in this example, and you're debt-free 2 months sooner.
With $1,000 a month, card-first is done in May 2030; car-first in July 2030.
The card charges 22.36% and the used-car loan 11.19% (Experian's Q2 2026 average). Both minimums together are $731 a month; this example has $269 extra.
| Debt | Balance | APR | Minimum |
|---|---|---|---|
| Credit card | $6,610 | 22.36% | $189 |
| Used-car loan | $27,852 | 11.19% | $542 |
| Total | $34,462 | $731 |
Bars drawn to scale. Minimums are held fixed, there are no new charges, and the first payment is next month.
The order each plan pays them off
Extra to the card first:
- Credit card paid off in March 2028
- Used-car loan paid off in May 2030
Extra to the car loan first:
- Used-car loan paid off in April 2030
- Credit card paid off in July 2030
Try one of your own debts
When the car loan comes first
If your car loan rate is higher than your card's, which happens with some subprime auto loans, flip the order: highest rate first still wins.
Before paying a car loan off early, check the contract for a prepayment penalty.
Keep the car payment current
Whichever order you choose, the car payment has to stay on time. Missed car payments can lead to repossession, and losing the car can cost you the income that pays everything else.
Have more than one debt?
Add your cards, loans and mortgage to see one debt-free date for all of it, and which to pay first.
Common questions
Does paying off a car loan early help my credit?
Not much on its own. Lowering a card balance usually helps more, because card utilization weighs heavily in most scores and an installment loan does not.
What if I pay only the minimums on both?
That takes 5 years and 11 months and costs $14,429 in interest, versus $8,117 with the extra on the card.
How this payoff estimate is calculated
The strategy plans use a total monthly budget of $1,000 across the debts listed above. Minimum payments stay fixed. Extra money and payments freed by a cleared debt are applied to the remaining debts in the selected order. The minimums-only comparison does not roll freed payments forward.
Each month, interest is calculated as the opening balance × APR ÷ 100 ÷ 12, then the payment is subtracted. This repeats until the balance is paid off. Total interest is the sum of those monthly charges; displayed dollar amounts are rounded.
Dates assume the first payment is in November 2026. Dates move forward with the calendar; this does not change the number of payments for the same inputs. There are no new charges, fees or rate changes in these examples. Rates are illustrative inputs, not loan offers or a quote for your account.
Actual statements can differ because of payment timing and daily interest. The CFPB explains how credit card companies calculate interest. See our debt payoff glossary for definitions.
Written and reviewed by Todd K. Ballenger. Read our editorial policy.
Educational estimate only, not financial advice. Interest here is charged monthly at APR ÷ 12; card issuers use your average daily balance, and real fees, rate changes and new charges will change your numbers. Disclaimer.