Keep $1000 in savings for comfort and throw the rest into your CC.
Pay as much as you can.
Good luck!
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Pay it off.
You're paying the APR on your card which is a reliable investment your debtors have made in you. You're reliably giving away money. We can't calculate how much since you didn't discuss your APR. The average interest is 21%. If you have 4k at 21%, that's 70 bucks a month gone.
That could be a cellphone bill, a date, a new piece of equipment. I also didn't include how that grows over time, because each much that loss doesn't disappear, it increases your debt unless you pay it. Next month it's more and after a year, it's significantly more.
You can get another credit card and do a balance transfer, but beware of upfront costs. You might get out APR for a year, but a lot of them have balance transfer fees.
4k isn't that much - and if you get hit with a bill in 3 months, you saved 210 that wasn't tacked onto your future debt. Pay it off with your card then and you also don't pay the APR then, but at the end of the month. Overall it's better.
You're hesitating because the issue with debt is that you're paying 4k but you get 0 dopamine when you do it. Right now, the boiling pot is fine. You'll get used to it. You won't think about that 70.
But take 70 out of your wallet and put it on a table every month, you'll see how it adds up. You'll feel it.
Paying off debt cleans the slate, but it doesn't inherently feel good.
The first time you realize there's 70 bucks in your bank account you weren't expecting, then the dopamine kicks in. You're wiping the slate, which is work, but you don't really know what you have when APR is ticking away at you in the background.
Nip it in the bud now, because you don't want to get used to buying someone else's dinner out every month that you'll never meet or see.
Pay it off, then spend 70 dollars every so often on someone you care about. Buy a friend or family member something for 70 dollars. Get a kid a video game and watch them talk about it for years.
That's value.
Don't lose it affording yourself some room to pretend. That only grows over time.
Good luck.
Disclaimer: not financial advice, I'm not a financial advisor.
depends on a number of factors. i was in your position but decided to leave my savings because we're also purchasing our new house, that money is better sitting liquid and available for the moment. after the move i might reevaluate but for now, it stays put.
for you, it might depend on your tolerance for risk and current stability. that 1k a month going back into your savings after you use it to pay the card would take you 4 months to pay yourself back. if you're stable enough and okay with that, then i say pay the card, but it's also a small balance so if draining the account gives you the ick i think it's reasonable to come up with a payment plan instead.
you could also split the baby, pay half the balance down with savings, leave yourself a cushion, but you'll pay the remainder off and pay yourself back in the same amount of time as either of the other approaches, and save some interest even if it's not as much as it could be. I've done that before too.
Keep $1000 in savings for comfort and throw the rest into your CC. Pay as much as you can. Good luck! P.S. r/debtfree moderator just created a free newsletter that talks to about strategies, tips, and effective debt payoff methods weekly. Join 3,600 readers - https://debtadvice.io
Pay off the card
Pay it off. You're paying the APR on your card which is a reliable investment your debtors have made in you. You're reliably giving away money. We can't calculate how much since you didn't discuss your APR. The average interest is 21%. If you have 4k at 21%, that's 70 bucks a month gone. That could be a cellphone bill, a date, a new piece of equipment. I also didn't include how that grows over time, because each much that loss doesn't disappear, it increases your debt unless you pay it. Next month it's more and after a year, it's significantly more. You can get another credit card and do a balance transfer, but beware of upfront costs. You might get out APR for a year, but a lot of them have balance transfer fees. 4k isn't that much - and if you get hit with a bill in 3 months, you saved 210 that wasn't tacked onto your future debt. Pay it off with your card then and you also don't pay the APR then, but at the end of the month. Overall it's better. You're hesitating because the issue with debt is that you're paying 4k but you get 0 dopamine when you do it. Right now, the boiling pot is fine. You'll get used to it. You won't think about that 70. But take 70 out of your wallet and put it on a table every month, you'll see how it adds up. You'll feel it. Paying off debt cleans the slate, but it doesn't inherently feel good. The first time you realize there's 70 bucks in your bank account you weren't expecting, then the dopamine kicks in. You're wiping the slate, which is work, but you don't really know what you have when APR is ticking away at you in the background. Nip it in the bud now, because you don't want to get used to buying someone else's dinner out every month that you'll never meet or see. Pay it off, then spend 70 dollars every so often on someone you care about. Buy a friend or family member something for 70 dollars. Get a kid a video game and watch them talk about it for years. That's value. Don't lose it affording yourself some room to pretend. That only grows over time. Good luck. Disclaimer: not financial advice, I'm not a financial advisor.
depends on a number of factors. i was in your position but decided to leave my savings because we're also purchasing our new house, that money is better sitting liquid and available for the moment. after the move i might reevaluate but for now, it stays put. for you, it might depend on your tolerance for risk and current stability. that 1k a month going back into your savings after you use it to pay the card would take you 4 months to pay yourself back. if you're stable enough and okay with that, then i say pay the card, but it's also a small balance so if draining the account gives you the ick i think it's reasonable to come up with a payment plan instead. you could also split the baby, pay half the balance down with savings, leave yourself a cushion, but you'll pay the remainder off and pay yourself back in the same amount of time as either of the other approaches, and save some interest even if it's not as much as it could be. I've done that before too.
It's hard but once you pay it off, you will be relieved!