mm3mmt
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Its always best to pay the intrest fist befor earning interest. Unless you are earning higher interest then what you are paying. If you are earning higher then 11% intrest with the IRA, then dont pay the card at all. If the intrest rate of the IRA is lower than 11%, put all of your money to the card. Money works faster if its not being charged intrest.
i.e. lets say you have a ballence of $10 at an apr of 10%
You also have a savings account with a rate of 5%
If you put $10 in the account it would earn $0.50 in a year.
During that same year the card balance would increase $1.00
So you lost $0.50 that year. If you payed off the balance at the begining of the year, you wouldnt lose any money. |
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Paula M
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pay off unsecured revolving debt first. Then lower the limit on that card. Your available credit line is too high and is having a negative effect on your FICO score. |
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HH@20
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Pay off the credit card. |
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shortstop25@sbcglobal.net
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Pay off the credit card!! Get rid of the debt and then you can take care of investing for your future. There is no feeling like being debt free!!! |
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Joe T
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Would you borrow $11,000 at 11% and invest that $11,000 into your 401k? That's what you are doing if you don't pay off your credit card debt. |
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answermonkey
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Your IRA might get 11% return, or it might not. With cumulative interest on your credit card you're likely to lose more anyway.
Pay off the expensive debts first, then think of investment. |
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cosaxteacher
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I think it would be better to pay off the debt, because then you can take the money that you pay towards the debt and invest it. |
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seek_out_truth
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Absolutely, get rid of all of your credit card debt FIRST. This is a guaranteed return. Learn to live without debt - it's the first step to financial freedom.
Find more sound financial advice here
http://www.freemoneyfinance.com/ |
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rainfingers
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Call the credit card company and ask for a lower interest rate, and threaten that you will transfer your balance and close your account if you don't get what you want. Even with a lower interest rate you'll probably want to pay off the debt before maxing the Roth, but it will help. |
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Darby
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Max out your IRA. Get a home equity line to pay off your credit cards. |
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R H
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Pay your credit card first. taking care of your debts is more important becasue it will end up costing youmore and more than longer you wait. |
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fathead
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Though your IRA *might* return more than 11%...you didn't say what it is invested in... there are other advantages of getting rid of your debt.
You'll get rid of that 11% non-deductable interest expense.
You'll improve your credit rating.
You'll have one less thing to think about if someone takes out your job.
Can you restrain yourself from spending once you pay off the debt? If not, then go for the Roth IRA. ;-) |
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holykrikey
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Try settling with the credit card company. 1st you have to be in collection with the company. Next call them and find out if they sold the account. They will have all the info on who bought the account. Call them and see if they will take 30% or 40% of the orignal price, which they will usually go for. If they agree have them send you a letter stating what they agreed to and then send the money but make sure you receive the letter whether it was faxed or mailed before you send the money. Also make sure they give you enough time to receive the money or if it is over deadline they will take the money and still want more. Now you have enough money to both settle w/the credit card company anhd contribute to your 401K. |
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Allen
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Pay off the credit card, unless you are confident you can make a return on your Roth IRA that exceeds 11% including the tax savings. And you probably can't. |
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yogi bear
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For a real education in Financial Freedom go to Dave Ramsey's website....you won't be sorry! He has a wealth of information that will be very educational and informative. www.daveramsey.com and you can email him at daveonair@daveramsey.com. |
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MathTeen
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Definitely pay off your credit card. FIRST
Then start putting money in your Roth IRA. |
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