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Author: CMD Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 311084  
Subject: Re: Saving vs. Paying credit card debt Date: 4/22/1997 1:39 PM
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****I once had a college accounting professor state that credit card debt was the DEBT DEVIL--worse than all other kinds. He went on to ask 'What use is a savings account for emergencies if you have credit card debt?' His point was that in an emergency, the most important asset is GOOD CREDIT. His advice was to take cash and pay off as much debt as one was comfortable with paying at one time. The sooner you are debt free, the sooner the money you make stays in your pocket.

Agreed, a professor of mine stated that the term 'Savings Account' is the most inappropriate name for it because of the insignificant amount of interest earned. However, credit cards, even those with low introductory rates of 5.9, are eating up not only the interest you 'earn' with the savings account, but also into your savings.

Building a few months of savings for a rainy day is a nice thought, but the best, and perhaps most Foolish, way to truly save money is to pay off all high interest CCs, and then avoid using a savings account to store rainy day funds...rather invest in something that will return better than the 4% mentioned, and also able to be liquidated quickly for quick cash.

CMD out
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