Question: Apparently a lot of people *do* max out their credit cards due to medical bills and emergencies. However, I know several people who use cards to unwisely spend, spend, spend.
One gal at work refinanced her home last year when mortgage interest rates were down in order to pay off some of her high-interest credit cards. She didn’t say how much she was paying off exactly but the impression was that it was a LOT, over ten thousand dollars. And now she not only has the mortgage but her cards are maxed out again on things like clothes, trips, gifts, maintaining a place at the lake and other (IMHO) fripperies. She and her husband both have *excellent* jobs, but she is constantly worried about all the debt they carry.
Answer: However, in many areas of the country, housing prices are rising quickly. This is the dilemma I’m in – I’d like to save up enough money to have a little wiggle room for repairs, larger downpayment, etc. But just in the past year, housing prices have risen 20% or more, much faster than inflation or my salary! Even though it is usually prudent to wait and pay off any debts, you need to look at other factors as well. My advice is pay off the CC first. Renting a few more years will not kill you. Over the years the amount of intrest that you pay on the debt just might. Sounds like you make a nice income, it souldn’t be hard to pay off the cards in a few years.
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