Options (50k cash, 200k 401k, 2k a month cash) to pay off 20k cc balance. Which one would you use?
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Anonymous
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Use the cash on hand and rebuild savings over time?
Use monthly left over to pay off balance gradually while paying cc interest? Loan from 401k and pay off balance ASAP with monthly cash? |
Anonymous
| I'm not understanding why you would not use the cash? Why pay interest to either your credit card of your 401K? I'm not seeing any advantage. |
Anonymous
| Cash on hand and rebuild savings with monthly 2k. |
Anonymous
+1 |
Anonymous
I like a cushion for emergencies. |
Anonymous
But then again, guess I can always access the credit card/401k for true emergencies? |
Anonymous
| $10K, $1200 a month till paid off |
Anonymous
| You'll still have a 30K cushion and only 10 months to rebuild at your rate. In the very unlikely event you have more than a 30K emergency during that time you can put it on the credit card and still be better off than if you used a different approach. |
Anonymous
Your emergency is that you racked up 20k in cc debt. |
Anonymous
With that kind of money and obviously high income there is no excuse for having 20K in cc debt. Can't imagine how that happened. |
Anonymous
Bought first house and furnished it and replaced some things. Most of the cc debt from tools, furniture, replacing/fixing appliances. |
Anonymous
| Pay it off with the cash and then rebuild savings with the extra $2k a month. |
Anonymous
Why didn't you pay for all of that using the cash you had in hand? You sound dumb. |
Anonymous
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You didn't mention the most important number -- what's the interest rate on the credit card?
*Also, borrowing from your 401K is a terrible idea. I say this as someone who borrowed from my 401k to get my down payment to 20%. |
Anonymous
Hence why I am asking. Would you cut your safety net near half, if you have one. |