I have an outstanding credit card balance of $ 8,288.76 at 18.99% APR. We are paying roughly $500 a month, which is about 300 over the minimum. However, the finance charges costs about $138, seems to me to be a losing battle. I have 13K in a savings account that is making just over 1.3% interest. Just about 9k should cover 3 months worth of expenses.
I want to know, what many others seem to want to know…Should I pay off the card which costs me ~$130 a month in interest with money from my savings that earns me about ~$70 a year if lucky? The monthly credit card payment would then be applied back to the savings account to rebuild that.
Most of your past advice seems to lean towards keeping the savings…are there any situations in which you would recommend paying off the credit card if this is not one such case?
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P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.Should I Use All of My Savings to Pay Off My Credit Card? - Hal by Steve Rhode