Comments on: Should You Use Your Emergency Fund to Pay Off Credit Card Debt?

By: Credit Card Criticizer

Credit Card Criticizer — Tue, 05 Jun 2007 08:08:25 +0000

Of course, it is better and wiser to use emergency fund for paying off the debt. What's the use of saving money on ambiguous purposes when you have a current danger of falling into credit card debt abyss?

By: Rodeo of Debt Reduction #14 → We’re In Debt

Rodeo of Debt Reduction #14 → We’re In Debt — Sun, 15 Apr 2007 00:41:24 +0000

[...] Money Smart life takes a look at paying your credit cards off with an emergency fund. [...]

By: pf101

pf101 — Tue, 10 Apr 2007 03:34:13 +0000

It sounds like they have bigger problems. If they can’t get control of their debt then odds are good that if they pay off the debt with the emergency fund they would just run up the debt again and then have debt and no emergency fund.

What they really need to do is get on and stick to a budget so they can get out of debt AND keep their savings.

By: Wealth Building Lessons

Wealth Building Lessons — Mon, 09 Apr 2007 20:44:00 +0000

I think they should pay down atleast half the balance with their savings and then try to build it back up.

when they’ve acheived that, they should pay off the remaining 5k and again rebuild the emergency fund.

I think the wife might have a spending problem if the husband isn’t willing to use the emergency fund to pay off high interest debt.

By: Personal Finance and Investing Blog » Blog Archive » Carnival of Debt Reduction #82

Mon, 09 Apr 2007 17:33:11 +0000

[...] Money Smart Life writes about using emergency fund to pay debt. Thoughtful question: If you had $10,000 of credit card debt and $10,000 in an emergency fund would you use the emergency fund money to pay down your debt? [...]

By: No Credit Needed » Blog Archive » Carnival of Debt Reduction #82

No Credit Needed » Blog Archive » Carnival of Debt Reduction #82 — Mon, 09 Apr 2007 16:24:46 +0000

By: Ben

Ben — Fri, 06 Apr 2007 05:42:28 +0000

Thanks for the feedback, some good points to consider. Now we just have to get the message across to this couple.

By: Tim

Tim — Thu, 05 Apr 2007 21:25:29 +0000

you’re fixing the symptom and not the problem.

By: Lazy Man and Money

Lazy Man and Money — Thu, 05 Apr 2007 19:14:14 +0000

Of course you should use emergency funds to pay of credit card debt if you credit card interest rate is more than you can make in your emergency funds (which is the case probably 97% of the time). If an emergency comes out after you’ve paid off your credit card, you can just put more on the credit card again. Worst, worst case, you’d have to get a cash advance (if it’s an emergency that only takes cash, I can’t think of one) and that would be a hit.

As Jeremy points out, “I’m sure they can build it back up but if an emergency does come up fairly soon after it drops to zero then what? You have to use the credit card to fund that emergency and you wind up in the same situation.” If the worst case scenario is to be back where you started, is that really a bad thing? The average case scenario is pretty helpful, and best case is a big savings.

By: Tim

Tim — Thu, 05 Apr 2007 07:56:44 +0000

also, have they looked at calling the cc company to reduce interest rate? have they looked into applying for a 0% BT card?