I want to open a savings account but I still owed 1600.00 on my credit card. Sould I open the savings account or payoff my c/c first?
2006-07-20 09:04:04 · 14 answers · asked by ♪♥bored♣♫ 3 in Business & Finance ➔ Personal Finance
You need to compare the rates to one another. Most likely you credit card rate is over 10% while your average savings account is barely at 1%. If you did the math you would be better off by paying off the 10% instead of only earning 1%.
A good way to view it would be if you had $10,000 in cash and you had $10,000 in credit card bills. If you were to put teh $10,000 into the savings acccount, you would earn $100 in interest while the $10,000 on the credit card will accumulate $1000 in interest, thus putting you another $900 more in debt. With any investing iit always wise to pay off the highest % rate and then move on to the next highest rate.
Good luck.
2006-07-20 09:18:04 · answer #1 · answered by Air_Assault 1 · 0⤊ 0⤋
Facing financial constraints are not un common and are temporary. You may apply for an another life free cc and transfer the outsatanding dues offered, generally, for interest free . If you could able to settle within the free period,well. Or else transfer the balance to your earlier cc before the expiry of free credit period. By then you will be better placed financially and settle the dues and advised to cancell both the cards. Try to understand the many benefits offered by the cc issuers and make use of them to your best advantage without incurring any thing financially. You can very well go ahead with opening a savings account with a bank with the maoney on hand and manage the cards also if you plan in a meticulous way.
2006-07-20 10:09:44 · answer #2 · answered by ab 1 · 0⤊ 0⤋
It really doesn't matter what you do first. as long as you eventually do payoff the CC. If you have the 1600.00 right now to pay it off make sure you still have enough cash flow left over for the daily unforseen expenses. Otherwise you'll just go back to using the CC to get you out of an emergency big or small
2006-07-20 09:13:52 · answer #3 · answered by El Fuego 1 · 0⤊ 0⤋
Unless your credit card has an interest rate of 5%, pay off the card first.
The goal of opening up a savings account is a good one, especially for an emergency fund.
However, if you need emergency funds before the card is paid off, you can still use the card as your emergency fund. In the mean time, you'll save on the high credit card interest rates.
2006-07-20 10:49:00 · answer #4 · answered by Uncle Pennybags 7 · 0⤊ 0⤋
Pay off your credit card first.....you are surely paying more interest on that credit card than you will make in interest if you put the money in a savings account.
2006-07-20 09:11:09 · answer #5 · answered by Special K 2 · 0⤊ 0⤋
pay the credit card off first then you can open up a savings account
2006-07-20 09:08:51 · answer #6 · answered by vick 2 · 0⤊ 0⤋
pay off cc first....no point in saving the money when you have debts to pay. The interest will only keep adding up, the sooner the better. Good luck!
2006-07-20 09:09:40 · answer #7 · answered by missesbean 3 · 0⤊ 0⤋
The amt you will be paying in interest on cc would be much more than any savings acct interest accrued. Definitely pay off the cc.
2006-07-20 09:07:46 · answer #8 · answered by wannabebeachbum 3 · 0⤊ 0⤋
credit card first, money can't go into savings until it's yours. you have to pay what you owe first, then whatever is left is yours
2006-07-20 09:08:56 · answer #9 · answered by jean 4 · 0⤊ 0⤋
payoff your card first. if u dont, it will haunt u for the rest of your life
2006-07-20 09:07:19 · answer #10 · answered by Anonymous · 0⤊ 0⤋