When To Pay Off Your Credit Card

Should you pay off your credit card now or wait until you’ve saved up more money? This is a question many people face. Perhaps unemployment and other poor financial circumstances may have caused you to accrue credit card debt. But now you’re back on your feet with a new job and a little bit of disposable income. But yet you still have that pesky credit card balance which isn’t going anywhere. Do you pay off your debt now or wait until you have even more money? Let me break down the three different options available to you:

Pay It Now

You can choose to pay off your debt now so you stop wasting money on interest. Each month that you make credit card payments you’re basically flushing money down the toilet paying the high interest rates. Over the course of years we may be talking in the ballpark of thousands of dollars you’ve spent just on interest alone.

If you pay your credit card off now, you may not be prepared for either an emergency or an unexpected expense. So while you will have less coin in your pocket now, in the long run you’ll have more from what you’ll save by not paying interest charges.

Make Monthly Payments

In this option, you only make your monthly payments and you put the rest in your emergency savings account. By doing this, you won’t be ruining your credit score since you won’t have delinquencies nor any late fees. Your bank account will also grow quickly since you’re not tackling your debt, but delaying repayment of it.

After all, what’s to stop the universe from forcing you to need an expensive root canal the day after you spend all your money paying off your credit card? Yes, you’re paying interest but you can look at this interest as a kind of monthly insurance you pay to be able to keep money in a checking or savings account.

Split The Difference

Make a big payment (perhaps half of your total balance). This will drastically lower your monthly payment minimum while leaving yourself some financial wiggle room in the case of an emergency. This is probably the most practical option while you build your emergency savings account up. This way, you’re still making monthly payments (which helps to improve your credit score) but you aren’t broke and you’ve greatly reduced how much money you’ll spend on interest rates.

Dealing with credit card debt is a tricky issue but take comfort in knowing that millions of Americans are struggling with the same problem. In fact, dealing with debt is one of the most commonly refrained concerns in our nation. No matter what approach you take to reducing your debt or managing it, be sure you have considered your options from multiple angles to properly analyze the pros and cons of each situation.

To help get you out of credit card debt you’ll need to save more money. You can do that by automatically transferring money from your checking account to your savings account once you get paid every two weeks. You can also do things like curbing your entertainment expenses and impulse purchases. Another way of saving money is by getting a lower car insurance quote, cutting off your cable tv service and switching your cell phone plan.

Share This Post

Twitter Facebook Google+ Pinterest Pocket

About The Author

Edwin C is the money hacking millennial behind Cash The Checks. He lives a minimalist lifestyle and is always eager to learn and share his methods to save and make money. If you've found this post helpful, please share it on Twitter or FB!

Related Posts


  1. Shaun

    I like how you handled this topic. Credit card debt is so stressful, but emergency funds are very important. It’s important to make the choice that is right for you and your comfort level.

  2. Tessa

    Thanks for sharing your view. I’m in that situation now and I decided to put most of my spare money towards my credit cards, with just a little added to my emergency fund. Wouldn’t it just be easier if it was already all done…

Leave a Comment

Your email address will not be published. Required fields are marked *