Is it a good idea to pay off credit-card bills with savings?
If you have some extra money in your savings account, give serious consideration to taking the cash and paying off your high-interest credit cards or auto loan. You ll benefit because the interest you earn on your savings is probably far less than the interest you re paying on the credit card s balance or loan. If you have loans at, say, 12%, paying them off is like finding an investment with a guaranteed return of 12% tax-free. You would actually need to find an investment that yielded even more — around 18% — to net 12% after paying taxes to justify not paying your 12% loans.
