Ask Terry Questions Credit debt

Credit debt

By Terry Savage on August 14, 2018 | Credit/Debt

Hi Terry!
I own my home and since owning my home I have acquired about 25,000 in credit card debt. I have about 140,000 in my 401k. I’m wondering if I should cash some out in order to pay my credit cards. Otherwise I don’t know what other options I may have. Thank you for your help.

Terry Says

Don’t cash in your 40l(k); you’re going to need it one day! Follow this simple formula to get out of credit card debt. Do it one or two cards at a time, while continuing to make the minimum monthly payments on the others. Then pick one card and do this:

DOUBLE the current minimum monthly payment — and write that amount down on your check book or on a post it on your computer screen.
Pay that same amount every month (not double the NEW minimum, but the original number you wrote down).
Your credit card balance will be paid off in less than 3 years!

Do the same thing with each card. Get another job for the next three years and use the money to make the double payment on every card! Otherwise you’re digging yourself a deep hole — and it will take you at least 30 years to get out!



a personal
finance question