Pay Credit Card Debt With Retirement Fund?
News from Fox Business:

Dear Debt Adviser,
I’m 47 and have a retirement fund that’s worth $ 209,000. I also have two credit cards with a total balance of $ 9,900, interest rates of 8.8 and 11.8%, and a combined monthly payment of $ 200. Should I use my retirement fund to pay my credit card debt? My retirement fund allows me to take out two loans at any given time, and I can get loans for 50 months at 4.25% interest.
— Julie

Dear Julie,
I lean toward Murphy’s Law when planning. If something can go wrong, it will, and it’ll happen at the worst possible time. So I’d be cautious. You certainly could take out a loan from your retirement fund account, but why would you? The negatives of raiding your retirement fund outweigh the positives.

True, you would pay less on interest charges with the retirement fund loan than your credit cards. But you would lose the compounding interest on the money you borrow. In addition, if you change employers or get fired, your loan would become due in full. In most cases you’d be required to repay that loan 60 days after a change in employment. You could end up losing nearly half of your loan to early withdrawal penalties and taxes on the money you borrowed. You have a great start on your retirement savings. I say leave it alone and let it work for you.

If you continue to make the $ 200 monthly credit card payments, y…………… continues on Fox Business

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Consumer Credit Increases in September; Credit Card Debt Falls
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Consumer credit in the U.S. increased in September for a second straight month, led mostly by increases in auto and student loans. Credit card debt fell in the month after an increase in August.


The Federal Reserve reported that outstanding revolving credit, primarily credit cards, fell by $ 2.9 billion in the month, or at an annualized rate of 4.1 percent, to $ 852 billion.

The growth and contraction of credit card debt has been uneven for at least the past year, with wide monthly fluctuations.

But broader trends show that consumers are beginning to use their credit cards more after a three-year precipitous decline. Since bottoming out at around $ 842 billion in April 2011, consumers have added about $ 10 billion to out…………… continues on InsideARM

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