paying off credit cards

iVillage Member
Registered: 03-26-2003
paying off credit cards
3
Wed, 03-26-2003 - 10:53am
I am trying to figure out if I should sell some stock to get out of debt. The rate of return on my stocks is at present only slightly better than the interest on my credit cards. However, it is also my only significant emergency fund.
Avatar for zaboz
iVillage Member
Registered: 03-26-2003
Wed, 03-26-2003 - 3:18pm
I would be tempted to do it. Because, even though you won't have an emergency fund left, you won't be in debt and can hopefully start socking away savings. Of course if your

stocks are in the toilet right now (I don't follow the stock market, so I have no idea) you may want to wait until they rise a little.
iVillage Member
Registered: 04-22-2003
Tue, 04-22-2003 - 6:48pm
Oh, if I were you, I'd pay off those cards--the return on your stock is marginally better, and in the long run, the cc debt costs you so much more.

So, if I were you, I'd sell the stock.

Cheers,

Isabella (bella909)

Avatar for phoenixmama
iVillage Member
Registered: 03-20-2003
Tue, 04-22-2003 - 7:43pm
I would strongly advise against this, unless you are behind on all your expenses and debt, getting shutoff notices and collections threats. If you can learn from MY mistakes, hindsight, and current knowledge, don't make the same mistake. I sold a batch of mutual funds several years ago to pay off debt. Looking back, it was one of the worst money mistakes I ever made. If I had just stuck with a payment plan, I'd be out of debt AND still have those funds plus hundreds (if not thousands) in returns.

Of course, it also depends on when you bought the stocks, what kind of stock it is, and how much they were worth. If you just bought it recently and haven't lost much on it, maybe you have less to lose. But if you bought higher and you just happen to be losing money on your stocks at the moment, this is the worst time to sell.

The whole point is to buy low and sell high. Unless you are truly in dire need of this money, leave it alone until the market picks up... unless it looks like the particular stock you bought will bottom out and you'd lose it all.

And in the future, instead of buying stocks, invest your money in a regular savings account where you are guaranteed some interest. At this point, stocks are a long-term investment. And given the present market, you're also better off investing with a reputable company in diversified stocks and/or mutual funds.