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No. of Recommendations: 6
Well, I'm in roughly the same position as you, with respect to credit card and student loan balances. So here are my thoughts, in no particular order:

- How did you end up in CC debt? Was it for qualifying educational expenses that you couldn't get loans for, medical expenses, unemployment, or just plain old living above your means? I think that's an important consideration for HOW you go about paying them off, because slogging through the old fashioned way with your snowball teaches a much more meaningful lesson than does paying them off in one fell swoop with a windfall.

- How will either of these scenarios affect your cash flow? I know you said that for the next year you would have an extra $1000 a month, but after that things would get tighter. Keep in mind that the student loans can be put in forbearance in times of economic hardship, but the CC companies will just send you to collections if you don't pay them every month. This is a great benefit of student loans, in addition to them being forgiven in the event of death or permanent disability.

- The $8000 in free money 3-4 years from now. What are the odds of you actually getting this money? Is there any chance of you leaving the job that is giving you these benefits (I'm figuring you're in a branch of the military, or doing some kind of Americorps/Teach for America type service?) Or of their budget tightening up and they not being available anymore? 3-4 years is a long time to project out.

These are some of the factors I would think about when making the decision. If it were me, I would lean heavily towards paying the CCs off, but as I said in my first point, this would depend a lot on how I got into the CC debt in the first place. You don't want to win the battle and lose the war, so to speak, if you don't learn your lesson about the risks of consumer debt this time around.

Good luck!
Bethdig
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