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Author: pwyles Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308685  
Subject: Re: Buying Stocks with my Credit Card? Date: 4/22/1998 5:58 PM
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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).

-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).
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You've already done most of the math on this one. Here's my take on the two options.

If you stay in the plan you make $325. This is the employer match ($435) less the additional interest ($110) you'll have to pay by not paying earlier.

If you pull out of the plan you "make" ($110) from the interest payments you don't have to pay.

This does not take into consideration what the stock price does, or how bad you want out of debt. Based strictly on what you make it looks like staying in the stock plan is the best choice.

~~paul
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