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Author: Dominicus Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308846  
Subject: Buying Stocks with my Credit Card? Date: 4/22/1998 5:05 PM
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Hello Fools!

1st Posting to this Foolish Board,

Help this Fool decide what to do! Here's my dilemma:

Like a fool, I'm swamped with credit card debt at 16% APR. My current plan puts me out of this
curse by Feb'99.

I'm also enrolled in my employer's stock purchase plan. For every 2 stocks I purchase with
after-tax dollars, they add 1. Whithin a two year period, I can sell the stocks I paid for, but forfeit
the "gift". If I hold on to the stocks for 2 or more years, I can sell all if I want.

So I'm effectively buying stocks at a 33% discount IF I DO HOLD ON TO THEM FOR 2
YEARS. I'm contributing a fair amount (in my world) to this plan. Purchases are executed quarterly
at the lowest daily closing price for the quarter (potentially increasing the discount).

Being desperate to start building my savings, I had the idea of pulling out of the stock purchase plan
for now and dump this money to pay off my credit card (this would put me out of debt 3 months
earlier).

I can't come up with some math to help me weigh one option against the other. Here are some
numbers for the Foolish angels that so kindly would roll up their sleeves to pull this fellow Fool out
of despair:

-Stock: HWP
-Quarterly Contributions to Stock Purchase Plan: $870
-Quarterly Matching by my employer if I participate and hold stocks for 2 years: $435
-Credit Card Debt: $4,700
-APR on Credit Card: 14%
-Planned Monthly Payments to Credit Card: $750
-C.C. Payments if Pull Out of Plan: $1,040 (and save approx. $110 in interest paymts).

Thanks in advance for your insight and recommendations.

Dominicus
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