I have a $10k tax debt on a installment agreement at 4%, which they auto-withdraw ~$400 from my account every month. I also have credit card debt with a higher interest rate. Should I pay-off the tax debt with a 0% interest for 12 months, so I can pay-down higher interest debt faster? Or should I keep the tax debt hidden from my FICO scoring (710)?
If you can undoubtedly pay $834 per month, then transferring to the 0% interest credit card may be a feasible strategy. Otherwise, once the introductory rate expires the interest rate will increase beyond 4%.
You should instead consider transferring the credit card debt with the higher interest rate to the 0% interest card. If the numbers work, this could be the most cost effective option. Good Luck!
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