I have this credit card that I had $900 on the balance and it's no interest until August 2007. I also have $1100 of saving that can pay it off right now. Should I pay off the credit card or just keep the money for 5% interest and wait til August to pay it back? THANKS!
2007-01-29 01:53:08 · 6 answers · asked by nikita58467 1 in Business & Finance ➔ Personal Finance
I am working now and make ok money to cover my expenses. I also have rent, car loan and student loans which are fixed expenses each month. With cell phone bill, gas, grocery money, etc., there's not much left for paying for other things. I don't really have much of savings but I pay my credit card each month to keep it at zero balance.
2007-01-29 02:18:10 · update #1
I suggest you keep your savings at $1000 for a real emergency and then pay anything extra on balance. I also suggest no credit cards, period. And start a debt snowball.
Read: The Total Money Makeover by Ramsey for the debt snowball and why credit cards and debt rob you of future savings and retirement. Think what you could do with your paycheck if the only thing you had was your house payment or rent?? Dream big! Believe and act!
Interest rates don't matter. Being out of debt so you can get your money to work for you is what matters! Get out of debt the faster the better!
2007-01-29 02:43:29 · answer #1 · answered by mldjay 5 · 1⤊ 0⤋
$1100 @ 5% is about $4.50 per month in interest or $31.50 through August 2007.
You did not tell us if you are working. If you do not use the credit card and can take $130 per month out of your income each month to pay down the balance by August, then do that and leave the savings alone.
2007-01-29 02:02:55 · answer #2 · answered by NHMike 3 · 0⤊ 0⤋
I would do the second option which is wait till you pay it off on August 2007 since you have no interest. That will help your credit and also you can make little money on your savings.
2007-01-29 02:04:27 · answer #3 · answered by Mystika 2 · 0⤊ 0⤋
If you have the discipline to wait and not spend the money in savings, then keep it in savings. You'll have earned about $27 in interest during that time which you could spend on a nice lunch or a couple of bottles of decent wine (or whatever).
If however, you are the kind of person that'll spend it and can't keep your hands off it, then pay the credit card now!
Be honest with yourself and act accordingly.
2007-01-29 01:59:58 · answer #4 · answered by Dean 3 · 0⤊ 0⤋
You're always best to pay it off. Once it's paid off, it should be easy to rebuild your savings.
Statistics show that most people who do the "same as cash" deals do not pay the debts off in time. If you have the means, do it now, and be free from the credit card.
2007-01-29 11:11:43 · answer #5 · answered by Jen G 5 · 0⤊ 0⤋
pay it back why pay interest if you don't have to....unless you have a sure fired way of upping the anty on what you already have..personally I wouldn't take the risk ...you never know what may come up and prohibit you from being able to fulfill your obligations. pay now get it off yor chest besides it looks really good on your credit score.
2007-01-29 02:15:05 · answer #6 · answered by Anonymous · 0⤊ 0⤋