Should I cash in my 401k to pay off my high credit card debt?
107410
No!! You should never take money out of your 401k for any type of bills. The only time you should ever consider it is to get out of a foreclosure. Get on a budget and spend every dollar. Starting with shelter, lights, food, and then gas for your car. Now you have your basics covered. Next list your debts smallest to the largest. Pay the minimum payments on the larger debts and pay extra on the smallest one. Remember in the cartoons when they dropped a pebble in the snow on the side of a mountain? You got a snowball that started to get bigger and bigger. That what you'll be doing if you start this way. You'll pay off one debt and then take that payment and apply it to your next smallest debt. Just repeat the process after you get that one paid for. You'll be out of debt in no time. Good Luck!!
994345
If you can, find another way to pay off your credit card debt.  Of course, this is assuming that you're not about to go bankrupt or anything.  It sounds like you're not, as you are moving into a new home.  Don't borrow from your retirement, as that will start a bad habit.  It'll make it easier to do again and again, and then you'll be left with no money for retirement.
483630
Pay off the credit cards first. Any left over, can go towards less swanky furniture. The amount you pay in interest on your credit cards are astronomical. Think of the amount you can save in interest alone. Call the banks and find out how much! It's enough to make one sick! A word of advice, if you don't have money, don't get it on credit!
513851
First, I would make sure you have at least 3 months salary saved up in the bank or in a money market fund for an emergency fund. (Some people say 6 months.) Financial disasters like getting layed off or sick happen to all of us.\n\nSecond, I would pay off all high interest debt. Pay off everything you can except the house mortgage and student loans. Paying off debt is one of the best investments you can make. You will have more money in the future because you won't have credit card bills to pay.\n\nThird, if you have money left, start investing in stocks, bonds, and money market funds. You want to buy a diversified portfolio of stocks, as individual stocks are too risky. For most folks this means buying mutual funds. I like Vanguard.com, other people like Fidelity, TIAA-CREF, and DFA. Buy no-load, low cost funds. If you are like most people you will invest part of your money conservatively, in money market funds and bond funds, and part aggressively in stock funds. Vanguard.com has an on-line questionnaire which will give you an idea how aggressive you want to be. \n\nInvesting in a mutual fund IRA for retirement may give you an income tax break. Talk to your tax adviser. You may also be able to invest in a stock mutual fund via a 401K plan at work. Buying a house instead of renting will make you a lot of money in the long run. \n\nBelieving advice you get on Yahoo answers can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however.
908651
It sounds fishy.   If you have that much money to give to someone else,  just pay off your own debt and that will help you too.  I know when I opened to much credit too fast, it hurt my credit score a bit and were only talking about 1500 dollars.  This company is talking about credit lines of 10-15 thousand each.  That could show you as out of control and a credit risk and lower your score.
453448
Absolutely not! Don't do it. Your big problem isn't financial, it's behavioral. Most of the answers you've gotten are from financial types that have logics about least amount of interest, etc, but they're missing the issue that refinancing won't fix your habits, and you'll probably fall under the false perception that your cards are now free for more charging once their balances are transfered. \nBeen there, done that, so believe me, it will happen.\n\nFinish reading Ramsey, he's your answer.\n\nOnce of the respondants did suggest the debt snowball which is one step on the right track. \n\nWe're doing them now and they're working for us. So far we've paid $11,000+ in debt over the last 5 months, and put aside an emergency fund (and we're far from making big bucks)\n\nHere are the steps:\nPre-steps\n-get current on your debts - at least be paying minimums up to current month\n-cut up all your credit cards (yes, all of them.)\n-sit down with your family and explain that you don't want to live like this any more and that you want a better future for them. You guys are sinking and it will take a family effort to surface and eventually swim out of this mess. Once you've got their buy-in ...\n-stop paying extra on any of debts, including extra mortgage payments (we were doing this one) \n-do a simple budget to spend less and save more - we found we were spending Hundreds a month on going out to eat and see movies. Stop all that. Cook in. DVR movies on cable or get them from your library for free.\n-stop contributing to retirement temporarily or any other savings or investment accounts. Yes, even if your companies match - it's just temporary, you'll get back to investing later.\n-adjust your Withholdings through your employer to get more now and less tax return later. It's your money, may as well have it now.\n-have a rummage sale, sell any extra cars, and get out of leases if at all possible - they're a scam.\nNow - the real steps:\n1. Put $1,000 into a savings or MM account as an emergency fund (EF). \n2. Sort all your debts from smallest to largest. Pay minimum on all except the smallest. Attack that one with all the money you've scraped up (except for the EF) and your necessities (food, shelter, trasportation). Once you've paid the smallest, use what your were paying on the first plus the seconds minimum to attack that one. This is known as the debt snowball as it keeps increasing as you go. Keep it going until their all paid. Living frugally is key, during this period.\n3. Now beef up your $1000 EF to 3-6 months of expenses (not income) \n4. Resinstate future and retirement investing to at least 15% (match your companies IRA contribution, and put the rest of the 15% into Roth IRAs.)\n5. Invest in college funds for the kids if you have them \n6. Pay off the home early\n7. Build more investment and retirement wealth and start giving what you can.\n\nHope this helped! Again, don't fall into the trap of using debt vehicles to get out of debt. Pay what you owe. Live on less than you make and you'll get out of this.\n\npbaez\n\nIf you need more ongoing support, join our yahoo group Dave Ramsey http://finance.groups.yahoo.com/group/Dave_Ramsey_Debt_Beaters/
4641
yup, unless you're 59 and a half, then you will have to pay the full tax on the money taken out of your 401k plan, which means if you are working right now, you are in your income earning years, hence your tax bracket should be higher, maybe even to the next level depending on how much you take out of your 401k, since that would be counted as regular income.  and the IRS (uncle sam calls it a penalty, but I like to call it a tip) would also be needing that tip from you, a 10% tip for every buck you want to take out.  so, if you take 20,000 out, that would be more like 14,400 if your bracket is in the 28% range minus $2000 for that tip i would telling you about, which leaves you 12,400 for taking out 20,000.  not really worth it huh
938955
you prolly can, but you will pay HUGE early withdrawl fees and taxes.\n\nit is designed as a RETIREMENT ACCOUNT, the money is for your retirement, that is why early withdrawls out of a 401 {k} are highly troublesome
528770
All credit card companies now have a thing called a default APR, which means that if you are late with one payment, or go over your credit line one time, then you are charged a radically high APR, sometimes up to 35%.\n\nYes, it is abuse: CC companies love to target college students, knowing full well few people appreciate the challenges of owning a CC.\n\nDo what you can to pay off that credit card. It is very important to make a little bit more than the monthly minimum payment, as you could spend years paying that off.\n\nIt is very smart of you to start an emergency savings fund: keep on contributing to that.\n\nGet yourself another credit card, but a secured credit card, which means you put your own money up front, usually with a minimum of $300. You do need a credit card to build a credit history, which is very important.\n\nUse any future credit card very sparingly. Credit card companies are very bad when it comes to resolving customer disputes and they don't care if they lose you as a customer, so you can't negotiate lowering your APR. Just be really careful in the future with credit cards, and I hope you find a way to quickly pay off your balance.
728605
start with a small emergency savings, then pay off the debt.  After that you can invest.\n\nThink of it this way... would you take a cash advance on your credit card to make an investment in something?  Probably not.  So pay off the credit card and you save yourself the interest as well as free up more money to invest with.
659531
The fact that you are asking the question means you are on the right track... you are thinking about it. I have people who work for me, smart kids out of college, who have no idea, so this is not an easy thing. I try to teach my employees basic principals to financial Independence that will help them be successful, one book I steer them to allot, and often give out at Christmas, is "The Automatic Millionaire"\n\nThe basic idea is this: don't live beyond your means, but scrimping and eating ramen don't help either. Skip high interest credit card debt, invest in your 401 k, buy real estate. Don't lease flashy cars, buy simple reliable ones you can pay off quickly and then move up slowly. Stocks? if you know what you are doing. It won't happen overnight, but if you follow the advice, it can happen even if you are not pulling down crazy money.
450180
Don't get into debt to begin with!!  But if you already have, then the main thing is to pay more than the minimum required by the credit cards, etc.  That's the #1 way to pay off the debts quicker and to pay less interest. Even if you have to get another job. And this philosophy go's for any age! Good luck!!
555193
First, I would make sure you have at least 3 months salary saved up at the bank or in a money market fund for an emergency fund. Financial disasters like getting layed off or sick happen to all of us.\nSecond, I would pay off all high interest debt. Pay off everything you can except the house mortgage. Paying off debt is one of the best investments you can make. You will have more money in the future because you won't have credit card bills to pay.\nThird, if you have money left, start investing in mutual funds. I like Vanguard.com, other people like Fidelity, TIAA-CREF, and DFA.  Buy no-load, low cost funds.  If you are like most people you will invest part of your money conservatively, in money market funds and bond funds, and part aggressively in stock funds. Vanguard.com has an on-line questionnaire which will give you an idea how aggressive you want to be. \nInvesting in a mutual fund IRA for retirement may give you an income tax break. Talk to your tax adviser. You may also be able to invest in a stock mutual fund via a 401K plan at work.\nBelieving someone you met over the Internet and know nothing about is risky.  Read these websites for further information.
580728
Yes, pay cash for everything or else you will be in the same boat again. Credit cards are for them to make money and for you to spend it.
277626
It may be a good idea if you are having a hard time making payments on high-interest debt.  However if you are making the payments OK, you may actually be hurting yourself.\n\nIf one or two of your debts will be paid in 6 months to a year, you will have that extra payment available to do what you want very soon.  If you refinance, for 5 years, you might have a lower combined payment but you will be stuck with it for 5 years where you might have had a lower total payment if you had left things alone for just a few months and paid off a couple of your debts.\n\nIf you have a home and can get a home equity loan, you can take the interest off on your taxes but it also costs money to get that loan so it may be a wash.\n\nJust some things to consider.\n\nOne more thing, if you have a bank you do business with regularly, I would use that one to refinance.  You can also check www.bankrate.com.  That website can give you information about what banks are reputable and operate in your area.
395235
Pay in full if you can. If you can't pay it all, then pay as much as you can. \n\nCredit card debt has the highest interest of anything except maybe the pawn shop. If you can get a bank loan at lower interest to pay off your credit card debt, do it.\n\nCredit cards should be used for convenience, not for credit.
61950
Yes, of course.  Just ask your administrater for a witdrawal.  You can also take a loan against your 401k.