What would you do??

Here is your dilemma:

You have X amount of dollars owed on a low interest credit card.

You then have about $3,000 more than the owed amount in a CD. The CD is up next month and you can either take the money or roll it into another CD.

The money that is in the CD is, basically, all of your savings. Your would, if you paid off the credit card in one shot, have $3000 in your savings total.

So, what would you do? Continue paying the credit card until it is gone (which, by the time regular bills each month are paid you try to put as much as you can towards it but it is hard) OR would you take the CD money and pay it off, put the rest of the 3 grand in savings and start saving again to get where you were.

I'm in a pickle... lol, or should i say YOU are in a pickle haha

Re: What would you do??

If the CD is up next month, I would use a portion of it to pay the CC. Low interest or not, the interest is still going to build up on you.

Re: What would you do??

I would pay off the credit card. You can use the money that you would be using towards paying your monthly credit card (and then some) to your savings instead.

Re: What would you do??

Pay it off! it will improve your credit score and ease your stress. I just used my entire bonus check/tax return to pay off my debt and it felt wonderful for it to be gone!

Take the monthly payments you were making towards the credit card and put them in an ING savings account, you'll get back to where you were with less stress.

Re: What would you do??

pay off the credit card---or at the very least pay off between half and 3/4s. i know it might be a low interest card---but its still an amount you are paying with interest. is it a temporary interest rate? will it go up eventually?

no matter what i'd pay a good chunk off the CC off if not all of it

Re: What would you do??

I would maybe pay 1/2 off with the money from the CD. That way, you still have some money in savings and then you will be able to pay off the CC quicker.

It depends on how much is on the card and how long it would take you to pay off the card vs how much interest you would be saving.

Re: What would you do??

Thanks everyone!!

Hmm - I think we are better off taking the CD money and paying off the CC - then, using the left over 3 grand as a platform to build a big savings account - and just keep saving.

We are better off in the long-run. I guess I was just worried about the "what if something happens" and we need a large sum of money for an emergency - but I can't imagine needing more than 3 grand - so, I think we will be OK with that - for now.

And we'll take our excess money and dump it into savings vs trying to stress and pay down this CC as fast as we can.

Thanks a lot - I'll talk to DH about it tonight - We have discussed it a lot before but I was hesitant b/c I'm a worrier lol.

Re: What would you do??

This is easier than you think If you renew the CD will the interest rate be higher than the credit card? If so, keep the CD.

(I would also consider shopping around for CD rates, you might find an even better rate)

Re: What would you do??

I would pay off the CC....having the high balance on the CC would bother me.

Re: What would you do??

Posted by melbalalala

This is easier than you think If you renew the CD will the interest rate be higher than the credit card? If so, keep the CD.

(I would also consider shopping around for CD rates, you might find an even better rate)

Re: What would you do??

pay off the CC... No interest is better than low interest.

you can put some more money in the CD next time it rolls over.

(I only have 800 in a CD so you're doing MUCH better than I)

Re: What would you do??

Posted by melbalalala

This is easier than you think If you renew the CD will the interest rate be higher than the credit card? If so, keep the CD.

(I would also consider shopping around for CD rates, you might find an even better rate)

Re: What would you do??

Pay off the CC and start saving from scratch...

Re: What would you do??

No, keep the money in the CD and work harder at paying down the debit.

if you keep taking money away from your retirement money...you will not have anything left.

Message edited 2/28/2008 11:17:12 AM.

Re: What would you do??

Posted by bicosi

I would pay off the credit card. You can use the money that you would be using towards paying your monthly credit card (and then some) to your savings instead.

Re: What would you do??

Re: What would you do??

I would pay off the cc. Because no matter what, every month you are paying interest... I'd just get rid of it and start over saving

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I would pay off the credit card and ONLY use it for emergencies. Put the money that you would use to pay the credit card and put it into savings. No debt is better than debt anyday. You can pull out the credit card to use for an emergency over 3k.

Re: What would you do??

Re: What would you do??

It depends on what the "low interest" is?

My opinion of low interest is 0%, 1.9%, 2.9%. Is it that low?

If it's more than 2.9% i'd pay off the CC.

Re: What would you do??

Posted by JessInCA

Posted by bicosi

I would pay off the credit card. You can use the money that you would be using towards paying your monthly credit card (and then some) to your savings instead.

Exactly what I would do.

Re: What would you do??

Message edited 2/28/2008 9:50:18 PM.

Re: What would you do??

DH and I just went through the same thing with his car loan. We decided to pay it off and put the money we were paying for the car loan into our online savings account. We'll be saving money on the loan interest and building our savings again. It sucked, but I'm glad it's over!

Re: What would you do??

pay off the credit card