Should I pay off Credit Card Debt, or keep money in savings account?
Should you use money in a savings account to pay off credit card debt? The Dave Ramsey school of thought says yes…absolutely yes. Its like making 15 percent guaranteed return on your money. But what about having some money in your savings account for layoff, or other financial emergency? Isn’t it a good idea to have some instant cash available?
Well yes, that’s always wise. But is your credit card cancelled when you get laid off? Cant you just use your credit card for emergencies instead of needing the money in savings.
It’s a personal decision and only you can make it…whatever helps you sleep better.
The math is clear. Paying off high interest credit card debt is much better than playing both ends and trying to keep money in savings as well as carrying high interest debt.Its really a no brainer. But if the thought of not having savings is already making you uneasy, why not go with a blended solution. Just pay off as much as you are comfortable with. Why not just pay your credit card balance down to 1000 dollars. That might greatly reduce the interest. And still leave you sleeping ok .
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