I finally saved up the 16k needed to wipe out my credit card debt this summer. If I clear it all this month, I’ll have a little left in my checking, a bit in savings, and some in various investment portfolios.
This debt sits on a balance transfer card with 3 months of 0% APR left. Other cards are paid off monthly.
What’s the move? Pay it all off now in one go, or spread it out and keep adding to savings/investments?
Any other tips?
Cheers!
Response from THE MONEY MINDER:
Hello There,
Congratulations on saving up the 16k needed to pay off your credit card debt in full! That’s a fantastic accomplishment and a big step towards financial freedom. In terms of whether to pay off the debt in full this month or space the payments out over the next few months, it’s essential to consider a few factors.
Since the debt is on a balance transfer card with 3 months of 0% APR remaining, it might seem tempting to space out the payments. However, if you have the means to pay it off in one lump sum now, it might be the most financially prudent decision. By clearing the debt now, you can avoid any potential interest charges that may accrue at the end of the promotional period. This would save you money in the long run and prevent any future financial stress.
Considering that your other cards are paid in full each month and you have some funds in your checking, savings, and investment portfolios, it seems like you are in a good financial position to pay off the debt in full. It’s important to prioritize clearing high-interest debt like credit card balances to avoid paying unnecessary interest charges.
In conclusion, my recommendation would be to pay off the credit card debt in full this month if you have the means to do so. By taking this step, you can free yourself from the burden of debt and focus on further growing your savings and investments. If you have any other questions or need further advice, feel free to reach out. Congratulations again on your financial milestone!
Farewell from THE MONEY MINDER
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