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Home > Ask The Get Out of Debt Experts > Should I Use All of My Savings to Pay Off My Credit Card? – Hal

About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Jay

    Steve –

    What about credit card consolidation? My mortgage is dirt cheap–that is not my issue. I’d like to simply consolidate my credit cards (about $7,400 total) The interest on these is a killer over time. There are so many credit card debt consolidation services out there but it is hard to know which are trustworthy and reliable and which to stay away from. My “financial advisor” does not return my calls regarding this, so I’m not getting much help. I read the post above about paying off debt with savings and know that’s not the answer either. I’d like to consolidate and destroy the cards. What do you recommend?

    • Steve Rhode


      If your credit score is above 660, and you have the discipline to not run these cards back up again, the best solution is going to be a loan to pay them off. I’d suggest you look at the peer-to-peer site as a resource. Any of the advertised debt management or debt settlement services will harm your credit and the cards would be closed by the creditor. If that can be avoided, avoid it.

      If you are unsure what your credit score is, get a copy of your consolidated 3-1 credit report and get the credit score option. You’ll want to take a comprehensive look at what your credit report says about you, look for any errors, and correct them to bring your score up as high as possible.

      Keep me posted on what you decide to do.


  • Nicole Plescher

    Hehe… while putting financial information in the common vernacular “i.e. wild ass crap” definitely has a lot of merit, I just enjoyed your summation. Debt is just so emotional for so many people and that’s soooo often forgotten by the majority of financial advisors :)

    Have a great day!

  • Nicole Plescher

    Great advice. This was really profound:
    “Basically it all boils down to this. The interest you are paying is essentially an insurance policy that if some wild ass crap hit the fan for you you’d have cash in the bank to pay for it rather than drive you back or deeper into debt. Nobody ever found themselves in an emergency or accident with too much cash in savings.”

    Love your summation. While it may be tempting to get yourself completely out of debt by using savings, unfortunately, the consequences on your savings account balance could be devastating in an emergency.

    • Steve Rhode


      Was it the “wild ass crap” comment that was the most profound? (LOL)

      The savings vs paying off debt POV is one that so many “experts” miss because they focus only on the numbers. They can’t see the emotional and life value of prudent protection rather than what calculates best.

      I’ve lived long enough now and helped so many tens of thousands of people that my advice is based not on a formula, but real life observation. Nobody is ever sorry they had cash in the bank.

      Thanks for the comment.


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