What type of debt should my spouse and I pay off first?
The answer to this question depends on the type of debt you’re carrying. If you’re hauling around credit card debt at 15 to 18 percent interest, you need to pay that off pronto. Student, car and home loans need to be attended to as well, but the interest on these loans doesn’t hold a candle to credit cards. The reason is the interest rates. Credit card rates are often much higher and will continue to compound the debt and increase it vs. your student loan which is a set rate.
Carrying credit card debt or missing payments does a number on your credit score, too. If your ultimate plan is to purchase a house or you want a new vehicle, you need to have good credit (unless you have the ability to pay for one in cash, of course).
When you and your spouse are making a choice to pay off debt, it’s also important to remember that if you’re married, it’s not his debt or her debt; it’s your debt, together. You’re a team and punishing the other isn’t going to help the situation. Work together and you’re bound to see results sooner.