Help Debts

Posts Tagged ‘percentage points’

I have credit card debts equal to 15% of the value of my 401k. I can take a loan from my 401k and pay it back over 5 years at 8.5%. Currently my credit cards have a rate 3-5 percentage points above that. I am 30 years old and contribute the max to my 401k. My feeling is that I might as well be paying the interest to myself instead of to the credit cards. Also I am 25-30 years away from retiring. I can use the money I save from paying my credit cards each month and start a Roth IRA and/or invest it in mutual funds and stocks as well as college plans for my daughter. I also have money in mutual funds that I could liquidate to pay my credit cards. What do you think is the best option? I figure I am young enough where this is a good option because I know you really are not supposed to use your 401k for loans