Question: Well, the subject may say it all. I’ve received an unexpected, and rather large bonus at my place of employment.. and since we’re budgeted and xmas is almost over, I’m honestly kindof torn as to what to do with it.
I could: 1. Put it all away in investments… but this is almost ‘extra’ and is definitely unexpected and I think I want to enjoy a bit of it now.
2. Put it towards paying off a credit card or something. See above note.
3. Buying an expensive gift for my wife. But is this a tradition I really want to risk starting?
4. Waste it all on myself, both for pleasure and for a few basic necessities. I need new glasses, for example, and I’ve been craving a playstation for about 3 years…. (please, please, no lectures on the playstation, and “Yes”, I DO know how old I am 
5. Setting it all aside for a land/MH/house purchase..
I’m not really asking a question here everyone, I guess I”m just trying to think outloud… any input is greatly appreceiated.
Thanks for your time, as usual.
Answer: I am a CPA, and have been CFO of several multi-million dollar corporations. For the last 20 years that I have used a credit card I have used just one card and paid it off in full each month. If I were to carry a balance, the current rates on my card would be 16.8% for purchases and 19,8% on cash advances. I routinely counsel people who are up to their ears in credit card debt and their cards have rates at least that high or higher, excepting the occasional short-term promotion rate some banks use to encourage people to take their cards and transfer balances there from other cards.
Regardless of the specific numbers, the fact remains that any credit card rate is going to be significantly higher than that of any other debt instrument (such as a personal loan or home equity loan), and certainly much higher than any CD or savings account. A quick scan of CD rates shows them currently to be running between 5 and 6 percent, depending on term, which seem to be about twice the inflation rate. Therefore, even if your credit card were costing you only 12%, to put money into a 6% CD rather than relieve the 12% debt still keeps you falling behind. And just putting the money in a chequing account earns you zero percent (except for the rare interest-bearing chequing account which usually requires high balances and/or additional fees charged), which is a ridiculous option.
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