Like many young people, I never thought I would find myself facing serious credit card debt. In my early twenties, I told myself that I would never fall into any debt trap. I had heard so many horror stories, and I just knew I would not live out one of those.
Boy, was I wrong! Many many years later, I am struggling with credit card debt, and if I donâ€™t get a grip on things, I just might get buried. Naturally, I have been looking for ways to deal with this debt in the best possible way, as soon as I can.
One thing that I have been considering is using part of my savings and put more towards the credit card debt. A lot of people have been telling me that this is the wrong thing to do, but I do have a gut feeling that it might help. I did find a piece of advice at Money Central:
Earning one or two percentage points of interest on your savings, while paying double-digit interest rates on your credit card debt, gets you nowhere fast. To add to the injury, you pay income tax on the meager savings interest, and you canâ€™t deduct the credit card interest from your income taxes.
Seriously consider paying off high-interest credit cards or auto loans with savings. Pay off the cards with the highest interest rates first. Be sure to keep enough money in an emergency fund or in available cash advances to cover three to six monthsâ€™ worth of living expenses.
I think that is enough to convince me to get a little bit from my savings account. What is your advice for me?