Save or pay off credit cards?

Posted by: yonuh

Save or pay off credit cards? - 08/22/09 09:27 PM

Just asking for opinions here. I've seen experts on both sides of this debate. Some say pay the minimum balance and save; others say pay off credit cards asap, then save. I have a client who is debating this with herself, and I'm not telling her either way, but then I was curious about what you think. My inclination right now is to pay the minimum due and put away everything you can in savings 'just in case'. Others I know are throwing everything they can into their credit card payments to get them paid off.
Posted by: gims

Re: Save or pay off credit cards? - 08/22/09 09:36 PM

I chose to pay down my credit cards, then limit use to one. We have two, another in case of emergencies... plus, it helps our credit score (isn't that the dumbest thing!).
I started with the smallest, then went to the next, and so on, finally paying them all off. We've not replaced any, and don't intend to. Along the way, I continued to save, at a very small amount, but I had every intention of preserving the habit. Mind you, I'm a careful spender, as we've never been a high income couple... this might have had something to do with my success.
Things being the way they are might lead one to think having balances on credit cards a good thing... I think the opposite, but I can't think of walking away from a balance like someone else might, if things got rough. My thoughts, of course... I'll add that it feels good not owing him, her, and them.
Posted by: orchid

Re: Save or pay off credit cards? - 08/23/09 03:17 AM

Depends on the outstandindg amount to be paid and if you know you can pay off the whole credit card debt in 2-3 months. Then paying off some interest isn't a huge deal if one has deal with purchasing expensive, seldom bought furniture item on credit.

For myself I pay the whole monthly credit bill. I've had and used credit card since I was around 22 or so. I've defaulted only twice by accident, to pay off monthly bill: meaning i forgot to pay my monthly credit card bill.

I really don't want any credit card debt to carry over to next month.

It's a freaking amount of money for already high credit card interest on unpaid total amounts.
Posted by: celtic_flame

Re: Save or pay off credit cards? - 08/26/09 12:22 PM

our interest rates are rising so much compared with interest rates on savings that its counter productive or cost you more to save than pay the cards off. I putting everything i can to pay the things off. don't know if its same your end, interest rates wise.

because interest rates are so low people with cash are spending and getting good discounts because stuff permanently on sale.

people dependent on a large cash sum interest payout are really struggling because rates are so low. but that's a whole new direction sorry. Its not my position but it saddens me on people working and saving all their lives and now it aint working out for them
Posted by: orchid

Re: Save or pay off credit cards? - 08/27/09 01:42 PM

I believe our credit card interest rate for debt is 18%. I guess I don't know exactly the rate simply because I always pay off my monthly bills.

Just don't want debt. So the sooner you can pay off the debt the better, because as celtic said the savings account interest rate and interest rate for fixed financial instruments (the safe instruments) rates are low.
Posted by: Dotsie

Re: Save or pay off credit cards? - 08/27/09 04:05 PM

We pay credit cards off monthly too, but recall when the kids were younger and we tan a balance.

A friend recently got a home equity loan and the percentage rate was in the 3s! They paid off their credit cards and now have a tremendously lower interest rate.
Posted by: Saundra

Re: Save or pay off credit cards? - 09/01/09 02:34 PM

Yonuh, according to Suzie Ormond, the expert, the rules have changed. She used to tell peple to pay it off. Now she says keep your money and pay the minimum.
Posted by: jawjaw

Re: Save or pay off credit cards? - 09/01/09 02:35 PM

Better yet, don't have one. Pay cash for everything. Have one for a rental car or airline ticket, and that's all.
Posted by: Dotsie

Re: Save or pay off credit cards? - 09/03/09 07:54 PM

Great idea JJ. My aunt died at age 92 and never had a credit card.
Posted by: Anonymous

Re: Save or pay off credit cards? - 09/30/09 04:08 PM

I think that she should pay off the credit cards. Then once paid off, have only one card that pays you (her) back. For instance, I charge pretty much everything on one card (albeit save Ann Taylor Loft) and I know my budget limit. Thus, I use less stamps and I earn POINTS. I save those points and that is how I fly for free! That is the only way I can afford a plane ticket these days.

Once she has paid of the cards, decided her choice of payment (cash or charge), then she can save a certain percentage.
Posted by: Dotsie

Re: Save or pay off credit cards? - 09/30/09 05:45 PM

I'm all for paying off credit cards every month. I hope we've taught our kids to do the same.

Mom and Dad always said, "If you can't afford to pay for it, don't buy it." Makes sense.

However, I do recall having credit card debt at the beginning fo the year due to Christmas shopping. Now I try to start a few months early and spread it out. Have gotten a few things already.
Posted by: Di

Re: Save or pay off credit cards? - 02/17/10 04:29 AM

"Neither a borrower or lender be". Not sure where I heard that, but NO CREDIT cards in THIS house!

You are "owned/enslaved" by the cc companies. It's enough to be indebted to a mortgage, isn't it??
Posted by: yonuh

Re: Save or pay off credit cards? - 02/17/10 11:13 PM

The quote is from Hamlet: Polonius counseling his son Laertes. And I don't know what recesses of the brain that got dredged up from! My brain is constantly amazing me; I can't remember what I did yesterday, but this kind of trivia is constantly rising to the surface!! smile
Posted by: AvalonBlondi

Re: Save or pay off credit cards? - 02/17/10 11:59 PM

Your memory is impressive yonuh....I know what you mean about forgetting what you did yesterday though...I'd love to know why that happens to our memories..I can remember intricate details of my life from 40 yeaars ago but ask me what I ate for lunch today and I have to think about it for a long time..:)
Posted by: yonuh

Re: Save or pay off credit cards? - 02/18/10 12:52 AM

I think it's because, at our age, we have so much stuffed into our brains, there's no room for new stuff. That's my story, and I'm sticking to it!! LOL
Posted by: jakkom

Re: Save or pay off credit cards? - 05/19/10 03:47 PM

Pay off your credit cards, lock all but one away and pay that balance every month if possible.

Women tend to have poorer credit records. It would NOT be my advice to younger working women to go without building a credit record! That is a disservice, especially when circumstances change and women are so easily penalized for being older, earning less money, and being poorer credit risks.

Also, women statistically tend to save less money and participate less in company retirement plans than men. We need to change attitudes and become as fully involved as men in how we handle our own money and financial planning.
Posted by: chatty lady

Re: Save or pay off credit cards? - 05/19/10 10:31 PM

Welcome Jakkom, don't remember seeing your name before. I agree with you about paying off all credit cards but one and hopefully that one will be a credit/debit bank card, NO interest!

Women are sometimes preceived a poorer credit risk but I don't think most are. Women in most instances I have known keep the records, pay the bills etc. for the home when married, so if no longer married why wouldn't they continue to do so on their own?

The women I feel sorry for are the ones who innocently trust the husband to do it all and then when he dumps them they are like a deed caught in the headlights...

I have always advised all women (in my advice column) to educate themselves, know what they own as a couple, have and make sure their names on everything; so if he dropped over tomorrow they'd know where everything was and what to do with it....

And don't think it can't happen to you. My first husband died after just 5 years, and I was that deer in the headlights. But many, many years later when my second husband passed, I hade it all under control big time, and what a difference that made...
Posted by: jakkom

Re: Save or pay off credit cards? - 05/20/10 03:05 PM

Yes, but it isn't a question of us thinking women are as good credit risks as men. It's the financial institutions and credit agencies who make that decision, and women ARE perceived as poor credit risks if they don't take steps to protect themselves.

I have separate credit from my DH and there were several times when his cards were issued with a higher limit than mine. A very interesting difference that no one would realize save that I kept my own name after marriage, so it was very obvious to us there is real discrimination going on.
Posted by: jawjaw

Re: Save or pay off credit cards? - 05/20/10 03:12 PM

Pay them off. Cut them up. Period. Have one for travel purposes and use it only then.

I cannot believe the government lets the CC companies get away with the interest they charge over time. It is criminal.