Advice on Selling Stocks to Pay off Credit Card Debt

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Mark CappelJun 4, 2008
Should I sell stock to pay off debt?

Should I sell stock to pay off debt? I have a well funded 401k and save a small amount every month. I do have a fair amount of stock laying around for a long time worth nearly 15,000. This would pay off all my debt and then some. Would it be wise to sell this stock and be completely out of debt? The reason I ask is, this stock could also be used as a home down payment or emergency fund. I rent now and plan on renting for the near future. I figure the amount saved my being completely out of debt will offset the sale of stock?

First, make sure you have enough money readily available (cash, CDs, sometimes even unused lines of credit) to pay your expenses for 3-6 months (the longer it's likely to take to replace your income, the more you need to have available). You state in your question that you enough money to pay off the credit card debt and you also that you will have some money remaining. I suggest that you as much as you need to pay off the credit cards and then save the rest.

The only investment account you should leave money in when you have a credit card debt balance is your retirement account, such as a 401k or IRA. The reason is simple; you'll end up with more money if you take that money out of the stock market and put it into your debt. With the stock market, you can only reasonably expect to make around 9%-15% per year, based on the historical performance of the market. When you pay down your debt, you are guaranteed to save yourself whatever interest rate you are paying. Therefore, if your choice is maybe 9%-15% gained on the stock market, or paying off your 14%-29% APR credit card debt, go with the guaranteed win and pay off the card.

For more information onthe debt help options page.

I hope the information provided helps you Find. Learn. Save.




MMr. Harry, Jun, 2010
Greetings, Mr. Harry officer private loan firm? You been denied the opportunity to take a loan Your local banks? Here comes good news for you. We offer loans short and long term for personal and business Purpose. The loan amount ranges from 5,000.00 (dollars, euros or pounds sterling) to 50,000,000.00 (dollars, euros or pounds)
BBill, Jan, 2010
Read What Are My Debt Resolution Options? to explore your other choices.
KKim Smith, Jan, 2010
What if you don't have enough stock to payoff all the credit card debt?