Credit Card Debts
Hello Terry. Thank you for taking the time to read and answer my question. I have $19,000 worth of credit card debts. I will be receiving a 30K bonus (minus tax) in March. Should I pay off all my credit cards?
Terry Says
Yes, for sure — unless you have other pressing needs. But don’t forget that you will owe taxes on your bonus — so depending on your tax rate, it should work out about even. I’m sure you’re paying double digit interest rates on those outstanding balances so this is a great move.
BUT — it’s time to close a couple of those cards, and take the others out of your wallet so you don’t get into this trouble again. Keep open the longest held card (shows length of credit history) and the lowest rate card, or the one you use for rewards.
