MFOHome About Commentary Discussions Funds The Best Resources Support Us!

Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

Sign In Register

Categories

In this Discussion

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

Another use for Cash...pay down debt

beebee
edited January 2016 in Off-Topic
Cash (aka dry powder) is great for buying investment opportunities, but I wanted to discuss other uses for cash to lower personal debt.

Use cash to:

1. Pay off credit card (short term) debt. This provides a mechanism to "pay yourself" the interest rate on that short term debt rather than the credit card company. Most cards are north of 6%. Try finding a risk free 6% investment today.

2. As an alternative to paying off your CC debt, search for 0% offers that offer low or free transfers. Slate Chase card offers a card with 15 months of 0% interest and zero transfer fees (within the first 60 days of opening the card). Having cash to make larger monthly payments allows the debt to be paid off over 15 months with zero interest. Again, discipline yourself to use cash to lower or maybe eliminate your short term debt.

Here's the card link:
https://creditcards.chase.com/credit-cards/slate.aspx?B7C3=FH24R8&CELL=6248

3. Pay down Mortgage (long term) debt. Though this won't change your monthly payment it will shorten the term of the note. Shortening the note provides a interest savings that's equal your mortgage interest rate.

Here's a calculator for paying off your mortgage early:
mortgagecalculator.org/calculators/what-if-i-pay-more-calculator.php

Comments

Sign In or Register to comment.