Milo asked in Business & FinanceCredit · 3 weeks ago

Should I use my saving to pay off my Dept at once. ?

I have about $3,000 in credit card and collection Dept and have $2,000 in my savings Account.

The amount in my savings I was using to possibly put down on a new apartment.

But is it better to use what's in my savings to pay off my credit and collections debt to raise my Credit score all at once or just keep my saving and pay off my Dept over time.

Which is financially the best thing to do?

4 Answers

Relevance
  • Who
    Lv 7
    3 weeks ago

     financially paying of debt is the best thing to do

    But it may not be psychologically

    HAVING a debt (but with savings) may encourage you not to spend more until that debt is paid so as to preserve your savings

    Being debt free (but no savings) may not stop you spending (and so not build up your savings back to where they were)

    Personal finance is a battle between the financial aspects and the psychological ones

    Having cash in your pocket or a credit card gives you the "feel good"  factor making it just too easy to go out and spend more than you should - cos to you "debt" is only numbers on a piece of paper

      On that paper the only difference between no debt and high debt is the size of the number - Its only when the number is high enough will it have an impact on your daily life - And until it does THAT you will not take much notice how big it is -

    But by then its too late

  • 3 weeks ago

    Pay off your debt. The debt would definitely cause you to be rejected from at least some apartments. Keep saving and consider a second job for a short time, until you have sufficient savings to get your own apartment. $2,000 is NOT going to do it. You should have around $14,000 in the event you lose your job and need money to carry you through.

    Source(s): Certified Paralegal, with 25+ years' experience & with Landlord & Tenant law experience.
  • 3 weeks ago

    if you want to i would do that

  • Pearl
    Lv 7
    3 weeks ago

    if you want to i would

Still have questions? Get your answers by asking now.