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Which is better financially?

We have $500 on a credit card & are comfortably making double the minimum payment. We have $2000 in savings. Is it better to pay off the credit card & have less in savings, or to keep the money in savings & make payments?

DH and I have no clue which is better from a financial safety point of view...any advice?

 
Anonymous

Asked by Anonymous at 11:11 PM on Oct. 15, 2009 in Money & Work

This question is closed.
Answers (9)
  • pay it off because the interest on it makes it so you actually pay more than what you owe over time. Pay it off and then you can put the money that went toward the card back into savings each month...you'll be back to your balance in the savings now in no time
    DomoniqueWS

    Answer by DomoniqueWS at 11:20 PM on Oct. 15, 2009

  • Pay it off.
    Anonymous

    Answer by Anonymous at 11:15 PM on Oct. 15, 2009

  • Pay it off. Then rebuild your savings.
    gdiamante

    Answer by gdiamante at 11:52 PM on Oct. 15, 2009

  • It depends hugely on how much your interest rate is and how likely you are to run it back up. If you know you'll pay it off out of savings and not touch it again and begin rebuilding your savings asap then pay it off. If theres a good chance you'll pay it off then in a few months time its back at $500 again then leave it alone and do what you can to pay as much of it off as possible on your own each month.
    Anonymous

    Answer by Anonymous at 11:55 PM on Oct. 15, 2009

  • Pay it off and then make those "payments" to rebuild your savings... By paying the min payment you are paying lots of interest and just throwing money away!
    SabrinaMBowen

    Answer by SabrinaMBowen at 12:33 AM on Oct. 16, 2009

  • if the interest rate on the credit card is higher than the interest rate on the saving account ( and it certainly is), then pay off the card.
    rkoloms

    Answer by rkoloms at 6:44 AM on Oct. 16, 2009

  • If the interest rate... come on ladies my interest bearing checking is down to .11%. Anybody have a CC charging less than 1%. PAY IT OFF. Unless either of you might be losing a job soon. PAY IT OFF.

    Anonymous

    Answer by Anonymous at 11:42 AM on Oct. 16, 2009

  • Pay it off and rebuild your savings. Go to the library and check out a book called The Total Money Makeover by Dave Ramsey. It is about getting out of debt and staying out of debt and building wealth. Most importantly it talks about WHY. He addresses your exact situation. It is an easy read and it's all just common sense stuff, we all sometimes need a reminder. Also there is a group on here called Dave Ramsey Fans, check it out.
    slw123

    Answer by slw123 at 4:36 PM on Oct. 16, 2009

  • Absolutely pay it off!
    Anonymous

    Answer by Anonymous at 6:41 AM on Oct. 17, 2009

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