From my experience, when someone has credit card debts and then they either have a windfall of cash or they get a consolidation loan to pay off the debts....within 12 months they have credit card balances at least as much as they were prior to paying them off. I've never quite figured out why that is, but I've seen it time after time.
Unless you have changed your behavior regarding spending, I would strongly recommend two things: 1) Build up an emergency fund with the gift that you DO NOT touch for anything but major repairs to your house, medical emergencies and the like, and 2) pay down the mortgage so when it resets (or if you refi now) you have a good loan to value ratio.
Then, develop a systemmatic plan to pay down your debt. I've learned that everyone that has balances on credit cards has a certain tolerance level of debt. Once the debt gets to that level, they won't spend any more. That level can be the limit on the cards and for others it is a certain dollar amount. Once it gets to that level, they do something to pay it down. But, like I said, within 12 months it is back to where it is. So, I've learned to leave the balances high until they change their behavior and systemmatically work it down. Once they have changed their behavior in spending and pay down the debt, they rarely will grow the balances ever again.
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