Invest or pay credit cards
Invest or pay credit cards
I'm thinking of investing but the wife is insisting on chunking down the credit cards pretty quickly. I'm trying to tell her the cards have zero percent interest and those offers are valid for a good 10-12 more months now question is pay the minimum and invest monthly and pay the credit card balances off in full prior to 0% deals ending or just chunk them down and invest little monthly
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Re: Invest or pay credit cards
Your plan is good but don't invest in the stock market and invest it in someone guaranteed. (Even if the interest is low)
Re: Invest or pay credit cards
What happens in 10 months when the interest rate shoots up to double digits? Will you have enough money to pay the cards in full?
Re: Invest or pay credit cards
kerplunk wrote:What happens in 10 months when the interest rate shoots up to double digits? Will you have enough money to pay the cards in full?
Yes I will
Re: Invest or pay credit cards
Wait, is your plan to invest the money and then in 10-12 months use that same money to pay off the cards?
If that is your strategy, it's still OK, but I would put the money into a high-yield online savings account or possibly a one-year CD, not the stock market. (Just as MapleHermit as suggested.)
If that is your strategy, it's still OK, but I would put the money into a high-yield online savings account or possibly a one-year CD, not the stock market. (Just as MapleHermit as suggested.)
Re: Invest or pay credit cards
No plan would be to pay them off with new money saved not money invested and taken out to use towards cards
Re: Invest or pay credit cards
Remember you must pay it off in full or it will likely charge you back interest for the whole time on any amount not paid off.
If you estimate that in 10-12 months you will have enough cash to pay it off in full, then yes invest the cash you have now into whatever you are investing in. If not, just pay it off and move on. Credit card debt will cripple you.
If you estimate that in 10-12 months you will have enough cash to pay it off in full, then yes invest the cash you have now into whatever you are investing in. If not, just pay it off and move on. Credit card debt will cripple you.
Re: Invest or pay credit cards
On the other hand, if your wife is nervous about this then I would go ahead and pay it off. Any money you would earn by investing for the next few months instead of paying the debt will probably be very small and it isn't worth upsetting your wife. This can be a risky game to play if the car accident or other emergency happens just before the bill must be paid in full.
Laura
Laura
The views presented are my own and not necessarily those of the Department of State or the U.S. Government.
Re: Invest or pay credit cards
I agree with Laura. Your goal is to optimize your life, not just your investments. The amount you could earn in a guaranteed/low-risk investment for less than a year is likely to be trivial, but the reduction of tension at home may be significant.
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Re: Invest or pay credit cards
Pay it off. Then you can start investing whatever you were going to save up.
Being free of debt is huge, even if it's at 0% for a few months.
Being free of debt is huge, even if it's at 0% for a few months.
Re: Invest or pay credit cards
You are lucky to have a financially smart spouse. Listen to her, pay it off, all kinds of stuff can go wrong.Steady wrote:I'm thinking of investing but the wife is insisting on chunking down the credit cards pretty quickly. I'm trying to tell her the cards have zero percent interest and those offers are valid for a good 10-12 more months now question is pay the minimum and invest monthly and pay the credit card balances off in full prior to 0% deals ending or just chunk them down and invest little monthly
PS: the exception would be if there is a match you will miss in a retirement account.