Pay off credit cards vs keep money in the bank?

i think you should not use any money from your retirement or savings account to pay off your debt. what you need to do is cut back on your expenses stop buying frivilous things for awhile i dont mean you cant treat yourself but when you do set a limit. with the money you save you can start paying your debt off. but use a payment plan something you can afford with that extra leftover money. something else you could do is to cut back on the amount of money you put into your retirement and savings account, but do not stop it all together because you need some money when you stop working.

No you probably shouldn't use money from a retirement account.  But if you have a significant amount in regular savings, which may be earning only about 3 or 4% and you have interest on a credit card of say, 23%, it seems to be pretty obvious what you should do with the savings.  It doesnt make much sense, if you can reduce your debt significantly,  not to pay it down.  If you were to cut that $30,000 down to $15,000 then each of your following payments will go more towards paying the principal rather than the interest.  Does it make much sense to earn say $150 in  interest on savings while you are paying $300 in interest a month on a credit card debt?  You are basically losing interest on the savings, aren't you?

Hi,

     I think you should pay 2/3 of your credit cards using your savings account balance, maybe take 2/3 of what you have saved.  Then try to payoff credit cards that have the smallest balance first and then pay off the next higher balance. Then cut up the credit cards you had paid off.  You really have to change your lifestyle if you want to be debt-free.

No more eating out.  It costs so much money, we know that.  Cook at home and bring food to work and don't buy over there.  If you are driving a car with high payments, sell the car and buy a used inexpensive car for $3000.00 just something to transport you to your job.  Don't take any vacations.  Review all your bills and expenses and eliminate unnecessary expense.

    There is a website I will highly recommend.  Go to DAVERAMSEY.COM, buy some of his books.  This man has  helped change and improve the financial status of millions of people.  His focus is on how to get people debt free.  I always listen to him on talk radio .  I am sure he has a talk radio where you are, if you are in the U.S. He also has a TV program on FOX NEWS BuSINESS.

    By the way, I don't know what kind of job you have.  If you have a chance to work overtime too so that you can payoff your debts faster.

Please keep us posted.  I know this is not an easy undertaking but it is there to be dealt with.  You will be one of those successful people after you read Dave Ramsey's books if you will stick to the plan and have some sacrifices.  You are on your way to being debt free!!!

Take care and have hope.