[Tim Olive]

I have 3 credit cards 1784.15 combined. They all three have no interest for 1 year. I have a pretty secure job. I am worried about not being able to get another 0% with the economy and all when the year is over. I have a small nest egg of about 3300. Should I take 3000 of that and pay on my smallest card and then work toward paying down the others. I also so recently paid a bill that was costing me 150 a month. I plan on adding that monthly to the debt as well. Also, I wondered about taking out of my 401K and just getting out of debt all but my house and equity loan. I would like to retire in about 5-7 years. What is your advice? My 1st mortgage will be paid off in 5-6yrs.

[excon]

Hello Tim:

You're seeking specific financial planning advice from strangers on the internet. Even if we HAD a financial planner on this site, he couldn't give you the kind of advice you need, because, although you attempted to include a lot of data about yourself, you didn't include nearly enough.

In my view, this isn't something you can reliably do on the internet. You need a personal financial planner. They're not too much money. In fact, if you choose well, they don't COST you money - they SAVE you money.

excon

[ScottGem]

Let me get this straight. You have balances on these cards that are interest free for 1 year. And you want to take money that is EARNING interest and pay these off? Does that make sense to you? Sure doesn't make sense to me.

What I would do is take each balance and divide by 12 (or however many months until the interest free promotion expires) and then make that monthly payment. So that the balances would be paid off before the promotional interest period expires.

This way you are using the card company's money at no cost to you and letting your money work for you.

But make sure you pay off the balance before the promo interest expires. The way these promos work is, if you don't pay the balance before the expiration, then they charge you interest on the balance from day 1 generally at a high rate.

I've been doing this for years. I'll get a low promo transfer rate. Transfer high interest balances to them, then stop using the card until I've paid off the transfer.

[bmcmurtry]

I agree with Scott. Use the free money as long as possible. Once the promo rate is up you can probably find another interest free card with a promo if your credit is good. In the future, though it is best to pay off this debt at the end of each month to avoid paying interest. It is better to have less debt than more savings if you must choose since paying a basic interest rate on a credit card is way more costly than what you earn from a savings account.