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Should I Use My Savings To Pay Off My High Interest Credit Cards

Should I use my savings to pay off my high interest rate credit cards?

Should I use my savings to pay off my high interest rate credit cards? If I pay them off I would be left with half of my savings.

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Bill's Answer
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Generally speaking, it is not advisable to keep a revolving balance on high interest rate credit cards. One way to look at this is by seeing how much interest you pay on your credit cards and comparing that to how much interest you earn in your savings account. Interest rates for savings accounts at this point in time are much lower than what credit card interest rates are, unless you have a really low interest rate on a credit card.

You would probably save yourself more money by paying off the credit cards than to keep making payments for an indefinite period of time. As a rule of thumb it is typically advisable to have six months of your living expenses saved. Ideally, you would want to have the credit cards paid off, and have six months worth of living expenses saved in case of an emergency.

I hope this information helps you Find, Save, and Learn.

Best,

Bill

www.bills.com/blog

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4 Comments

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  • 35x35
    Nov, 2010
    Thanks for that information. I've been doing all I can to say and pay off my debt by spending money on just the necessities and using coupons information I learned here will help greatly too.
    0 Votes

  • CC
    Nov, 2010
    Calculate
    Bill, good answer. I usually recommend telling people in this predicament to simply calculate how much they're spending on interest alone. Unless it's "good debt" it's never worth carrying a balance and paying it all off is the best solution. I actually created a form online as well to help people calculate how much they're spending on interest per day, month, and year.
    0 Votes

  • JW
    Oct, 2010
    joseph
    Are you looking for a loan to pay off your debt and set up a new business of your own?Then you do not need to worry your self any more because harry has come with a lasting solution to your problems.
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  • MH
    Jun, 2010
    Mr.
    Are you looking for a loan to pay off your debt and set up a new business of your own?Then you do not need to worry your self any more because harry has come with a lasting solution to your problems.
    0 Votes

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