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Should I pay off debt but have nothing in bank?

So we own a home but want to move, we have been saving for a while for a down payment. I keep seeing my cc debt only go down by fractions of what I pay and I over it. I could pay 75% of my debt off but that would leave my account empty. I feel like the money we would save will quickly replenish the savings but I’m stuck. Advise?

Total debt about 18k and we have already paid down about 5k.

12 Answers

  • 1 month ago

    Others have given good information like the emergency fund.  My two cents is for you to work another job to get your credit card down quickly.  AND get qualified for a ZERO interest credit card.  You apply on line, it's good for 18-20 months, then you apply for a new account.  If you are smart, you don't let your balance get to big to pay it off before the 19 months expires.  You can save $100s by not paying interest.

  • 2 months ago

    Even if I was not planing to move, I wouldn't totally eliminate my savings to pay off debt. I would keep at least $1000 for actual emergencies. That said, I advise you NOT to think about buying a home until you pay off the credit cards, and have 3 to 6 months of expenses set aside for emergencies IN ADDITION to your down payment.

  • David
    Lv 4
    2 months ago

    Having been in debt before, I'd pay off the debt with those savings and then spend the time getting rid of the rest of it asap. Then you can build savings far far quicker. 

  • 2 months ago

    You should never leave yourself without something in the bank or in reserve. 

    What you need to do is make more than the minimum payments on those credit cards. Every month. And pay earlier so you don't accumulate so much interest. 

    In order to reduce credit debt, you should pay off the highest interest cards first--or with the most money per month--and pay more than the minimums. Paying the minimum payments doesn't reduce the debt by much.  DO NOT pay them off by only 75% with nothing left!! That would leave you with no way to handle an emergency if you had one. 

    Keep saving, too. If possible, set up an automatic deposit to your savings FIRST--before you pay your CC bills. If you even save $50 per pay you'll see it grow faster. 

    And perhaps investigate transferring balances to lower-interest cards if you can. Look for 'deals' on better cards--no yearly fees, better grace periods, lower interest--on places like Credit Karma or other credit-bureau monitoring websites. READ THE AGREEMENTS thoroughly first, though, before doing this, so you're not going to have fees for other things like "non-activity" on the cards. CUT UP and destroy the cards you aren't using regularly, and pay them off as soon as you can. Don't open NEW credit accounts. 

    Sign up for Credit Karma (or another credit-monitoring service) and see what they recommend to pay down your debt. 

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  • 2 months ago

    Pay it off - as much of it as you can.  The interest will eat your money quicker than you can eat a piece of cheese.  If you are looking to buy another house, nobody is going to give you a loan with that debt, or any debt.  So you will need to pay it off if you expect to get a loan for another house.

  • 2 months ago

    Pay off your debt, but make sure there is enough money in the savings account to cover emergencies. Also, prioritize paying off low quality high interest debt like your credit cards. 

  • 2 months ago

    Pay off as much as you can.  Keep 1-2 months of expenses just in case.  Assuming you still have the ability to charge on the card, in a worst case scenario you can always borrow again.  As is, you're just throwing money away.

  • ?
    Lv 7
    2 months ago

    Don't empty your savings.  Leave enough there for an emergency fund. If you don't, you'll just end up using the credit card again.  If your debt is going down that slowly you're either not paying enough each month, the interest rate is very high, or both.  There is a block on your statement that will tell you how long it will take to pay off your debt if you only make the minimum payment and how long it will take if you make a larger payment.  It's very sobering to look at.  You should be paying at least the monthly interest plus $100 or more to make any dent at all. Stop using the card if at all possible.

  • Lisa A
    Lv 7
    2 months ago

    You need an emergency fund. Once you have an emergency fund, everything you have after that should go to your high interest debt.

  • Tavy
    Lv 7
    2 months ago

    Depends if a lender will give you a mortgage with cc card debt. Take advice from a financial advisor.


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