pay off credit card or keep money in savings?
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Anonymous
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I have about $18,000 in a savings account. - This account is the "catchall" for emergencies and hopefully a down payment for a house someday. I haven't been contributing to it it lately because money is super tight, but it doesn't matter because the interest rate is less than 1%.
Here's what I owe: $2,800 total credit card debt across 3 cards $3,000 in medical bills that I'm slowing chipping away at through payment plans Should I use the money in my savings account to pay off this debt? I feel anxious about carrying around the credit card debt in particular, but I will feel anxious if I used money in my savings to pay it down. It's all the little cushion I have should SHTF. Plus, it's our dream to buy a little house and it took YEARS to save what we have (we're poor by DC standards). Thankfully, we have not faced major emergencies yet. I have one toddler and a DH who is currently unemployed (though looking very hard). We have no family support. What say you, DCUM? |
Anonymous
| Pay when DH gets a job. I'd worry about small savings and you losing your job. Keep the savings. |
Anonymous
| I agree with PP. If you and DH both had jobs now I would say pay off the debt because your interest rate is higher on the debt than what you can earn in savings. But if you really got in a jam, you'd need that cushion. Hope your DH gets a break soon! |
Anonymous
| Do not spend a penny until your DH finds a job. Not one penny. |
Anonymous
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What are your rates on th cc and medical? How much do you pay to each now, monthly?
If you do nothing you do losing money b/c of the difference in interest rates vs saving. I understand you are a little iffy right now with unemployed dh. Maybe pay off the higher interest rate and use the payment you would have made to it to speed up paying off the other debt. Once that is gone, start putting some of that saving(the monthly payments to cc and medical you no longer make) to your savings. This should get you back on the down payment nest egg. Also, think about opening a vanguard account with the saving you have(do a mixed based on your age, bonds, stock index). |
Anonymous
| If the interest rate on your CC is greater than what you are earning in your savings account then you need to pay off your CC. |
Anonymous
I agree - I'm sure the rate on your CC is much higher. Pay it off. |
Anonymous
| Definitely pay off the credit cards immediately. Continue with the payment plan for the medical bills. |
Anonymous
| Pay off the credit cards. |
Anonymous
| Normally I would say pay it off, but instead I suggest holding off until DH has a job. I would dip into the savings, though, before adding to the credit card debt. |
Anonymous
| I would normally say pay it off instantly, but I am swayed by the folks who say "wait until DH has a job and then pay them off instantly." I think that's good advice. Good luck OP. |
Anonymous
| Pay off the cards - your credit rating will improve. |
Anonymous
| Pay off cards w/out a doubt! |
Anonymous
That's really not their chief concern right now. |
Anonymous
| Pay off CC as it's a high %. Leave your medical bills -- probably at 0% anyway. |