Ask Terry Questions Savings vs pay down credit card debt

Savings vs pay down credit card debt

By Terry Savage on May 17, 2018 | Credit/Debt

My husband and I have about $240,000 worth of debt between our mortgage, car payments, and a couple high interest credit cards. We make all our monthly payments. With money left from our salary it's possible to be able to save $1000 a month. We don't have an large emergency fund. Should we apply that $1000 that we can save to paying down debts or continue to try and build on our emergency fund?

Terry Says

Well, I think you should try to have some cash on hand, but the smart thing to do is pay down those credit card balances asap. It will save you a fortune in interest.  If you can take this month's minimum monthly payment and DOUBLE IT -- and then write that number down and pay the SAME AMOUNT every month (not the new minimum) and if you don't charge another penny, you will pay off that card in less than 3 years!  Otherwise it could take 30 years -- and a fortune in interest! Put the cards away and pay cash for everything you would ordinarily charge.  Or use your debit card.  You will love the feeling of being free from the burden of credit card debt.



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