Ask Terry Questions 401k to pay off CC debt?

401k to pay off CC debt?

By Terry Savage on July 13, 2019 | Credit/Debt

Hello Terry, I am wondering if you can advise me on a financial decision.

I have 44K in Credit Card debt, some in 0% balance (limited time only) and others at high interest rates. At the current rate, it will take me well over a decade, in not more to pay it off. I make 65k, paying off a car and only 2 years into a Mortgage.

So my question is… Should I pull from my 401K ($95k), taking in tax hit to pay off my CC debt? Seems like I could loose the same amount as the hit as what I would in interests via CC debt.

Terry Says

No. No. And NO!   You can’t borrow from Social Security to pay down credit card debt.  And you can’t borrow from your 40l(k).  But you MUST address this issue immediately.  I’m wondering how you were able to get a mortgage with so much credit card debt!  You must be paying a high rate of interest on your mortgage, too!  Please IMMEDIATELY call the National Foundation for Credit Counseling at 800-388-2227.  That will connect you to the nearest local office. You can trust them. Be honest about your situation and follow their advice.



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