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Putting the $1K in the Roth is a no-brainer. You leave yourself the ability to put your full $4K into the Roth for 2007.

The more interesting question is, what do you do with your snowball after the 7.9% CC is paid off? When your CC interest rates are all cheaper than you can earn at Emigrant, it's time to make value judgments about allocating the snowball. How much to debt, how much to e-fund, how much to Roth or other retirement savings, how much to other non-retirement savings? The answers here aren't clear-cut, but there is considerable value to giving the matter some thought and trying to figure out what makes the most sense for your situation.


I found this reply to my "Roth or CC Debt" poll this morning, and I wanted to start a new thread with it because I think it's such an interesting question, worthy of discussion and debate amongst our insightful peanut gallery of reformed and reforming debtors.

For me, I think I still have several months before I have to face this question head-on, because after the 7.9% CC in the snowball, there's a card at 5.99% and another at a teaser 0% rate that expires in October. But after they are paid off, my remaining CC debt will be at 3.9%.

So what then? It's something I have been thinking about lately, and I'd be curious to know about the experience of others who have faced this hurdle and found a course of action that they are satisfied with. Or that you weren't satisfied with at first, and the process of iterations you went through to get somewhere you feel comfortable with. The reorganizing of financial priorities is one that we all have to face at some point in this journey, so on that note I'll turn this one over to the floor.

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