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Pay credit debt with savings?

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  • disneysteve
    replied
    Welcome to the site. Can you give a bit more info? Why are you only working part-time? Are you in school? What are your fixed monthly expenses?

    Without any more details, it certainly makes more sense to pay off high interest credit card debt than to put money into a low interest savings account. Your savings might be earning 1-2% but your debt is costing you 9.9 or 14.65%. I'd be putting every spare dollar toward the debt. I'd also be looking to boost income and slash expenses any way you can.

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  • martinb5
    started a topic Pay credit debt with savings?

    Pay credit debt with savings?

    Here is my situation. I have $3,000 in credit card debt spread over two cards.

    WF $1480 at 14.65%
    USAA $1550 at 9.9%

    I'm 20 and live at home with my parents, and accumulated the debt over the past few years mostly just being an irresponsible teenager and living beyond my means. I make around $1k a month working part time and just recently tried to start putting away some $ in a savings account, with an automatic withdrawal of $25 twice a month from each paycheck. So far I have just $350.

    My question is, should I continue this method of saving and try to pay off my debt at the same time? Or should I focus only on paying off my debt and take the $350 I've saved so far to one of the cards (probably the WF first). I'd hate to see nothing in the savings account but having this debt keeps me up at night. I'm not sure what to do, especially since my "savings" will only take a small chunk out of my accumulated debt.
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