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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308519  
Subject: Re: Credit card debt Date: 9/4/2012 11:58 PM
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I have recently found out that we owe a lot in credit card debt.

Well, something's not exactly right with this statement....

If you 'just found out' that 'we' owe a lot of credit card debt - was it your spending or your significant other's spending? Is the debt on your cards, your significant other's cards, or joint cards?

If it's on your cards, or joint cards, or was partly your spending, how did you 'just find out'?

Does it make sense to borrow from my IRA or 401 K to pay off the credit cards?

Well, you are not allowed to borrow from an IRA, so that's not even an option. Borrowing from a 401(k) isn't 'paying off' the debt - it's just moving it from one debt to another debt, and the 401(k) debt has a lot of potential tax issues that, if they occur, will likely cost you a lot more than the interest in on the credit cards would cost. So, it's not a good idea at all.

YOU CAN'T BORROW YOUR WAY OUT OF DEBT!

If you want to resolve your debt problem, you first need to start living within your means so that you don't keep adding to the debt. Then take the extra surplus income you have created by living below your means, and apply it to the debt.

AJ
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