I am taking a poll everyone jump in.

iVillage Member
Registered: 11-17-2007
I am taking a poll everyone jump in.
4
Thu, 08-14-2008 - 4:25pm

I have a question for everyone to answer. Think before you write a reply.


If you had credit card debt in the amount of around 20,000.00 but you were paying it at a rate of around 3.9 or lower.


And you had a saving account. That had around 10,000.00 in it. But the saving was earmarked for important things that you knew you would need money for in the future. Money is earning 4.00


So both are about the same.


What would you do.


Would you leave the saving stay there or would you clean it out to pay off the debt and gamble that the worse doesn't happen before you can rebuild it.


The amount you will be taking out of your earning will be

Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Thu, 08-14-2008 - 6:23pm
3.9% is cheap debt.

All my best,
Danni

iVillage Member
Registered: 07-15-2008
Thu, 08-14-2008 - 8:12pm

That is a tough one.

iVillage Member
Registered: 11-17-2007
Thu, 08-14-2008 - 9:16pm

The money makes 40.00 a month the debt cost around 20.00 a month more So we are talking about maybe 300.00 a year

iVillage Member
Registered: 05-09-2005
Thu, 08-14-2008 - 11:24pm
Assuming the 3.99 rate is for life, I'd NOT pay it off until you had saved up
1) enough to have a comfortable emergency fund
AND
2) enough to pay for the expenses that you know are coming.
I made the mistake of paying off a large amount of credit card debt when I knew something was looming on the horizon. I shouldn't have done that. Well, the expenses I had a hunch were coming up, came (the house foundations) -- and I cannot find a low interest for life offer. So paying off the low interest credit balance was a mistake. I should have had more money in savings before I paid it off. Finding a low interest for life offer is getting much harder AND they have really upped the balance transfer fees (3% with NO maximum).
Interesting question.
Megan