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Should I use savings or carry a balance!

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Nova5041
Frequent Contributor

Should I use savings or carry a balance!

This might be a silly question, but I have a large expense that I can not pay at once and would need a few months to pay off. I was thinking of just going into my savings and paying off the expense once i received the credit card bill or should I leave the savings alone and just make payments to my credit card company. I only ask this question because of the whole pay your self first philosophy! Thanks

BK 7 Discharged: 5/30/2018
Fico Scores after Discharge: Experian-552 TransUnion- 490 Equifax- 571
Message 1 of 30
29 REPLIES 29
Pway
Valued Contributor

Re: Should I use savings or carry a balance!

Yes leave your savings alone.  It does not hurt to carry a balance.  You have your plan set and stone, leave your savings alone.  Yes make the monthly payments per month to the credit card company. 

Thank you for the wealth of knowledge I have learned from these forums. I am logging off as of November 9, 2022. I wish everyone great success.
Message 2 of 30
Anonymous
Not applicable

Re: Should I use savings or carry a balance!

Im in kind of the same situation. Considered using a portion of my savings but decided Id rather open a card with a long 0% intro and pay it over time. Not sure if you'll end up paying interest on this expense but if so take that into consideration. If I was facing high interest fees I might have made a different decision.
Message 3 of 30
Nova5041
Frequent Contributor

Re: Should I use savings or carry a balance!


@Anonymous wrote:
Im in kind of the same situation. Considered using a portion of my savings but decided Id rather open a card with a long 0% intro and pay it over time. Not sure if you'll end up paying interest on this expense but if so take that into consideration. If I was facing high interest fees I might have made a different decision.

Yeah, wish I could do that. But I'm in the garden, and I just got 2 new accounts. 


BK 7 Discharged: 5/30/2018
Fico Scores after Discharge: Experian-552 TransUnion- 490 Equifax- 571
Message 4 of 30
Anonymous
Not applicable

Re: Should I use savings or carry a balance!

You're grown, you can do what you want. No one will stone you for stepping out of the garden for a purpose. lol But if your profile doesn't support adding a 3rd new account and you feel you'd be denied then thats understandable.
Message 5 of 30
Nova5041
Frequent Contributor

Re: Should I use savings or carry a balance!

Lol, yeah that's my biggest concern, my credit score is still weak, and I don't want to be denied and have another inq. 


BK 7 Discharged: 5/30/2018
Fico Scores after Discharge: Experian-552 TransUnion- 490 Equifax- 571
Message 6 of 30
Anonymous
Not applicable

Re: Should I use savings or carry a balance!

Smiley Happy Got it. In that case garden strong. Which card would you be using and whats the interest rate if any?
Message 7 of 30
Nova5041
Frequent Contributor

Re: Should I use savings or carry a balance!


@Anonymous wrote:
Smiley Happy Got it. In that case garden strong. Which card would you be using and whats the interest rate if any?

Unfortunately my CSP at 15.99 is my lowest Apr.


BK 7 Discharged: 5/30/2018
Fico Scores after Discharge: Experian-552 TransUnion- 490 Equifax- 571
Message 8 of 30
bada_bing
Frequent Contributor

Re: Should I use savings or carry a balance!


@Nova5041 wrote:

@Anonymous wrote:
Smiley Happy Got it. In that case garden strong. Which card would you be using and whats the interest rate if any?

Unfortunately my CSP at 15.99 is my lowest Apr.


What is your savings invested in ?

If it's a low or no interest account, I would use the savings and pay it back

rather than let it sit on a card at 15.99%. If you have been PIF on that card

and use it for monthly spending, the out of pocket cost will actually be more

than just 15.99% on the one large purchase. You'll loose the grace period and be

paying interest on your monthly spending charges from the day of each swipe.

 

 

+ 850 FICO8 since 2015, Thanks MyFICO - 5+ years since last HP
Message 9 of 30
Anonymous
Not applicable

Re: Should I use savings or carry a balance!


@bada_bing wrote:

@Nova5041 wrote:

@Anonymous wrote:
Smiley Happy Got it. In that case garden strong. Which card would you be using and whats the interest rate if any?

Unfortunately my CSP at 15.99 is my lowest Apr.


What is your savings invested in ?

If it's a low or no interest account, I would use the savings and pay it back

rather than let it sit on a card at 15.99%. If you have been PIF on that card

and use it for monthly spending, the out of pocket cost will actually be more

than just 15.99% on the one large purchase. You'll loose the grace period and be

paying interest on your monthly spending charges from the day of each swipe.

 

 


I agree with the above. But I'll also throw something else in here. If it's not your only card and you'll not have to use the card for other things during this time, then I'd really think hard about what else could be coming down the road. Is this definitely a one-time expense? Is it the sign something has changed and there might be other expenses/emergencies that will bring about the same dilemma? Also, if you carry a balance for a bit, maybe you'll get a CLI (though this IS Chase so I'd have said until recently it would be impossible, now I just say it's still highly likely with or without carrying a balance.) How large is the expense vs. your savings? Would it wipe out your savings entirely? How about splitting it so you're not taking your savings to zero and are minimizing the interest damage? (I'm much better at questions than answers.) 

Message 10 of 30
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