Paying off CC in lump sum?

[MarineVietVet]

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@Anonymous wrote:

I appreciate all the feedback I have so far received. Being in IT, the industry as whole is doing ok overal- No massive layoff so far. However, I can't guarrantee that my job is secure 100%. I am leaning towards the idea of paying this down gradually. I think having $15K in my saving gives me some psychological relieve should anything happen. I recevently found out that Barclays Card (US) which owns my USAIRWAYS Mastercard has set a cash available limit to $5K inspite of my credit limit, it means even if I have a credit available of $10K, I won't be allowed to access more than $5K in cash.

I guess keeping the cash in my saving would be okay in this instance but I will have to go on paying interest in the next several months before they are all paid off. 

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It comes down to what makes YOU most comfortable and confident. I am able to make different decisions because I have an excellent pension. You always have the option at a future date to still pay off the full amount. Keep us posted on how things go.

[marty56]

If it was me, I would PIF the debt.  Even if you loose your job, you probably will be able to find work in the IT field and without the money going to CC debt, you can be more marketable by low balling your salery.

For example, if your total CC debt payments are say 1000 a month, then being CC Debt free allows to you to take a 6k salary cut and still be ahead.

[smallfry]

OP how long would it take you to save 15K if you had no credit card debt? If you can't save that in less than a year it would not be in your best interests to deplete your life savings.

[wndrwmn78]

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@smallfry wrote:
OP how long would it take you to save 15K if you had no credit card debt? If you can't save that in less than a year it would not be in your best interests to deplete your life savings.

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Exactly...if you pay the cards all the way down, and put the money you usually use toward their monthly payments into savings, how long would it take you to build back up?

[Anonymous]

I would say at my current saving pace, it would take about 12 months to build up that saving again. To that effect, this is under the assumption I still have a job. I paid off my student loan in lump sum by mid october last year. This was primarily because someone had cosigned for it and wanted to get off the loan. As of now, besides my rent and other basic living expenses, my car note would be another big expense  ($500 a month) item which should be paid off in the next 7 months from today.

[jackg]

Financier,

One crucial bit of info is missing. What are you trying to accomplish?

It appears that your current situation has been so for awhile. I'm usually the guy who advocates for being pro active, but in your case I think I have a different approach. If your current situation has''nt bothered you so far, why change it now?

The value of your payment history with a creditor is not discounted or enhanced by the amount you pay above the the minimum payment due. I always PIF because I see no point in paying iterest fees to a bank, must be something in my DNA. If it's beginning to bother you then go ahead abd PIF one of the cards and leave a balance due of approx. 3% balance due on the other. Doing it this way will optimize your FICO scoring in the area of "Amounts Owed" (30% of FICO scoring).

Good luck