New Guy here with a Question about getting out of debt

AccountAnalyzer

My situation is I have been in the process of building my savings account up to $5000 by 1/15/08 and I have a $1339 credit Card balance. I was thinking should I continue to achieve my financial goal or should I just pay off the CC debt in full and set a new goal for the 15 of jan? My account now is in between the $2000 and $3000 range and I have just been the mininum payment on my CC so my savings account continue to grow. So what should I do? Thanks

tealady

Use the snowball calculator to see how much paying off the minimum on your CC is costing you. It will be an eye opener. That should help you decide. Personally I would always pay a debt ahead of saving as the interest on saving is usually less than on a debt.

hypno06

I would say that if the interest you are earning on your savings is less than the interest rate you are paying on you credit card, then you should pay off the credit card first, then build up your savings once you are debt free.

Karmacat

Yep, as tealady and hypno have said, if the interest you're paying out is at a lower rate than the interest you're getting in, then pay off the capital. It might look a bit strange, to see your capital sum go down, but you'll be able to build it up quicker again if you do this, believe me.

And what a nice dilemma to be faced with! Good for you!