Say you have a bunch of credit card debt that you need to pay off and you have some assets that you can use to pay off this debt. Some of the ideas that you should consider:

  1. If you own company stock or any stock of a company consider selling this asset and pay off your Credit Card Debt with the proceeds.
  2. Create a budget for your spending and stick to it. There is usually a little room for savings in any budget. Just make sure you apply that cash to paying down your debt or better yet, set-up a fixed account payment amount that is automatically withdraw from your bank account.
  3. Tapping into your Home Equity is not something you want to do unless the Credit Card Debt interest rate is much higher than what you can get in the current marketplace for a home equity loan. However, when you are taking out a home equity loan you are messing around with your long-term wealth for paying off short-term spending. Remember to NOT rake up any more Credit Card Debt after you have paid it off. You might feel wealthier because you now have a ZERO balance on your Credit Card, but it is best to create a budget and stick to it.
  4. Taking out a loan on your 401k is probably the worst thing you can do. It might sound good, but if you lose your job or get fired then you will need to pay off the loan quickly or risk paying taxes on penalties on the loan balance.

Regards,

Philippe Volo

CompareYourLoans Contributing Editor