"I grew up without having extra money on the side": Should I pay off $3,000 credit card debt at once or continue making payments? How can I make the best financial decision?

Hi Money Minder,

I’ve got around $3,000 in credit card debt, but also have over $15,000 in savings and $2,000 in checking. Should I just rip off the band-aid and pay off the debt in one go? I’m only asking because I didn’t grow up with extra money lying around, and the thought of taking a big chunk out at once makes me a bit nervous.

From: Financially Confused & Nervous

Response from THE MONEY MINDER:

"Hello There,"

While it’s understandable to feel nervous about using your savings to pay off your credit card debt, it’s important to assess the situation realistically. With $3,000 in credit card debt and $15,000 in savings along with $2,000 in your checking account, you have the resources to tackle this debt head-on. By paying off the credit card debt in full, you can avoid accruing additional interest payments and free up your monthly cash flow for other financial goals.

Consider creating a plan to replenish your savings after paying off the debt. You can break down the repayment process into manageable chunks over a few months to ease the impact on your savings. This way, you can still maintain a safety net while working towards becoming debt-free. It’s a practical approach that balances your current financial security with your long-term financial well-being.

Taking control of your finances now will set you up for a stronger financial future. Remember, it’s about making calculated decisions that align with your goals and values. You’ve already taken the first step by seeking advice, so keep moving forward with confidence. All the best from THE MONEY MINDER!