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Should I keep my savings or pay-down my credit card?
I have a little debt a House, 2 Cars, and 1 Credit Card with $12,000.00 @ 4% interest no additional fees. I have very little savings only $3,500.00. Should I take this $3,500.00 and make a payment on my Credit Card or should I keep my savings and just start making payments on my Credit Card? Starting Jan 1st I will be making 1,200.00 a month payments on my Credit Card to get it Paid in Full. Please advise what to do with my $3,500.00. Thanks
If $3,500 is your only savings, make the minimum payment on your credit card this month and hang onto your savings. I suggest this because a good general rule to follow is to have 30% or 50% of your monthly earnings as in a savings account. This savings should be set aside for emergencies and unexpected expenses.
See the no-cost Bills budget guide for more personal finance tips and advice.
I hope this information helps you Find. Learn & Save.
Best,
Bill
www.bills.com/
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Struggling with debt?
If you are struggling with debt, you are not alone. According to the NY Federal Reserve total household debt as of Quarter Q1 2024 was $17.69 trillion. Student loan debt was $1.60 trillion and credit card debt was $1.12 trillion.
A significant percentage of people in the US are struggling with monthly payments and about 26% of households in the United States have debt in collections. According to data gathered by Urban.org from a sample of credit reports, the median debt in collections is $1,739. Credit card debt is prevalent and 3% have delinquent or derogatory card debt. The median debt in collections is $422.
The amount of debt and debt in collections vary by state. For example, in New Mexico, 32% have any kind of debt in collections and the median debt in collections is $1651. Medical debt is common and 16% have that in collections. The median medical debt in collections is $700.
Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.
