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Is it smart to pay down credit card debt with your savings?

Are you carrying too much credit card debt? Have you found it almost impossible to stay current on all of your monthly card payments? Do you feel like there’s just no way you’ll ever get out debt? If so, you’re not alone. There are many people across the country, including in the Tampa area, which have credit card debt. However, there are ways to get out from under that debt.

Although many people might be hesitant to spend money from their savings account to pay off their credit card debt it can actually be a very effective way to get out of debt. When a person spends money on any item and uses credit to pay for it, he or she has essentially already spent money from his or her savings. Therefore spending money from one’s savings account on credit card debt is really just like transferring money from one account to another.

There are some good reasons to use one’s savings to pay off debt. Every month a person holds onto excess money in a savings account, and at the same time continues to pay high interest rates on credit cards, he or she is losing money. There is also a nice psychological advantage to paying down one’s debt. Of course, it is probably not the best idea to burn through all of one’s savings, because it’s always good to have something in reserve.

Getting out of credit card debt can be difficult but it’s not impossible. However, if you feel like you’tre completely overwhelmed by debt then you might want to speak with an experienced bankruptcy attorney.

 

Source: Daily Finance, “Should you use savings to pay off your credit card debt?,” Sally Herigstad, Jan. 24, 2014

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