Should I dip into savings to pay off my new stove or carry a balance?

L

LostCuddles4

New Member
We HAD to buy a new kitchen stove...I put it on our credit card -- $820! We have that amount in savings, but I'm literally dragingggg my feet pa ying for it in full because it took us SO long to get to our 2025 savings goal -- I DON'T want to touch it!! We have $220 cash right now to put towards it! Do I take the rest from savings (even though I don't want to--I HATE to see the savings dwindle!)?! Ughh!
 
$820 $220 = $600

APR/365 x $600 * 30 days = how much interest you'll pay per month if you don't pay it off.

$600 x APY / 12 = how much interest you earn per month if you keep it in savings.

In most cases, APR is higher than APY. So you'll pay more interest than you earn every month you delay.

Keep it in your savings till the credit card is due. Then pay it off.
 
Well, if you drain your savings to pay off the credit card and then have another surprise emergency, you'll have to use the credit card anyway. So you might as well keep putting money away in your savings account.
 
I have been on both sides of this while rebuilding my credit, and keeping an emergency cushion turned out to matter more than I expected. I paid off a card once and then a car repair went right back on the card, which felt like starting over. If your savings would still cover one real emergency after the payment, I would pay the stove off and be done with it. But if it would drain you to almost nothing, that peace of mind is worth a month or two of interest. Splitting it over two months like someone suggested above is a decent middle ground.
 
Back
Top