This was the question of the week.

We have our baby emergency fund of $1,000 and I was batting around the idea of using the emergency fund to pay off the $315 balance that remained after the balance transfer.

I let it go and felt it didn’t matter either way. I thought the best decision was to let my subconscious ruminate on it and when I got a flash of inspiration on why one decision was better than the other I would do whatever that flash of insight told me to do.

That decision cost me $70.

I didn’t take all aspects of the situation into consideration. That little bit remaining on the card was racking up interest! Leaving my emergency fund untouched is a nice thought but in retrospect the better option would have been to pay off the card.

While I can’t go back in time and do anything different, I can change it up today and I went right into the bank account, made the transfer from the emergency fund, and paid off that damn card! A $70 mistake, but one that cannot repeat next month because that card is paid off. Now we can focus our efforts on the two balances left. The Macy’s card and the Discover card with the balances.

I’m not as good at making these kind of “not life or death” decisions. I put off the decision and have to learn from small, painful mistakes.

Your mileage may vary (of course!) but the lesson I’m taking away from this is clear: Don’t grip money so tightly it costs you more money!

1 Comment on Would You Pay Off A Credit Card With Your Emergency Fund?

  1. Although I hate interest. I hate not having emergency cash more. I would have kept the savings and focused on paying down the debt quickly. It really comes down to a personal decision on how well one sleeps at night without a comfortable emergency fund. It’s different for everyone.

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