Take the money in savings and pay off credit card debt?
October 15th, 2009
blanquita asked:
Okay, so I have had this dark cloud of credit card debt looming over me for about 10 years. I have it paid down sufficiently, but a big amount is still there. I now have money in my savings that would allow me to totally pay it off. Opinions? Should I take the money in my savings and pay the credit card debt off completely? I have very good job security where I work, so I am not soooo worried about being laid off.
Okay, so I have had this dark cloud of credit card debt looming over me for about 10 years. I have it paid down sufficiently, but a big amount is still there. I now have money in my savings that would allow me to totally pay it off. Opinions? Should I take the money in my savings and pay the credit card debt off completely? I have very good job security where I work, so I am not soooo worried about being laid off.
pay it off.
i subscribe to the theory that if you have debt & savings,you have no savings.
and good for you for paying it down so much!!!
Well, if your savings account makes more interest than the interest rate on the credit cards, then it would be better to keep it earning more in the bank than it’s costing you in debt.
However, it’s SO unlikely that your savings interest rate is higher than your CC interest that it’s laughable.
You will save tons of money to get rid of that debt if you’re able. It’s costing you money every month to let a balance ride.
I would keep enough money for 2-3 months’ living expenses, and use the rest to destroy that debt.
I’m have this problem right now.
It depends on how this debt feels to you.
For me, It was important that I had some money in the bank and paying off my credit cards.
I saved a good cushion in the bank then when I got to a certain amount, paid in full one credit card at a time. I still have a way to go. But it seams to work for me.
If you are really secure in your job, I’d definitely pay off the debt. If your interest rate is 10, 12, 18%, that’s the amount you’d be saving. You cannot get that in a savings account that’s for sure. Pay off the debt–you’d be amazed how it will make you feel. That dark cloud of credit card debt looming over your head will immediately go away–10 years is long enough. Then what you save from having no debt payment put that into your emergency fund so you have enough to fall back on–the rest in investments, retirement, etc. Don’t let it steal any more joy in your life! I paid mine off last year and it’s the best thing I ever did. I don’t even have a car payment anymore. Do it tomorrow!
Pay it off. You will save an Immense amount on monthly interest charges.
Once you have it paid off. Put the card out of your wallet and
in a save place. Preferably in a box on the top shelf of a closet…
Pull it out every six months and treat yourself to a dinner.
Then put it away and pay off that charge when the bill comes.
That is the only good way to deal with credit cards.
Once it is gone put the money you would normally send to them into your savings account and you will have made up the loss in your savings account in no time.
There is no better sleep aid then knowing that you are debt free and that you have a nice money cushion in your savings account that is there for the real emergencies in life.
Your goal should be to have at least 6 months worth of full living expenses sitting in your savings account. That way, if you do lose your job, the world doesn’t come to an end and you can take your time looking for the next good job.
By all means pay off your debt immediately. Unless you have purchase something on installment that card company don’t allow you to settle ahead of the prescribed term. After you have settled your debt, get a huge scissor and cut your source of spending, your Credit Card.
Leave below your means while remaining comfortable. Save more, spend less. Cut your subscriptions, like newspaper, cable, internet. Leave on necessities. If you need catchup get it from Mc Donalds they are giving it away for free. Cut expensive coffee cost, use instant. Invest on Time Deposit, in that way you can’t just spend your money.
Give yourself salary out of your working salary, and pay cheap save more.