No. of Recommendations: 2
On Wed, 09 Apr 97 17:43:01 -0600, WorkingOnIt wrote:

Hi all,

I've seen articles that recommend having 3-6 months' worth of living expenses saved in cash. But what if I have a large credit card debt at 12% interest? Right now, I've got about 1.75 months of living expenses saved up, earning 4%. It would take me another year to get to 3 months' worth.

If I left the savings intact, I could pay off the CCs in 33 months. If I kept, oh, $1000 or something for quick cash emergencies and applied the rest of the savings toward the CC debt right now, I would be paid off in 27 mths, and would save about $1100 in interest. In this case, were a serious emergency to occur, I could always get the cash back off of the credit cards.

Any thoughts or experiences here?


* I am 'WorkingOnIt' :-)*


Let the credit companies help you lower your debt load instead of dipping into your savings.

The situation that WorkingOnIt describes is all to familiar around here. Fortunately it is also past history. To pay of our large credit card dept, I first started tracking My monthly interest charges and that was a great motivator to stop using those cards. Then I would track the total debt load each month and although the balance was going down slowly, I could see that I was making progress (another good encouragement). What made a big difference was transfering the credit balance to new cards that offered low introductory interest rates. I went from paying 18-21% to paying 5.9% and made the same payments, lowering the balance much faster.

So keep your eyes on the snail mail. Last week I applied for a card charging 0.0% (yes zero) interest for the first six months on purchases and 5.9% on balance transfers.

There is a light at the end of the tunnel.

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