Using Savings to Pay Off Credit Card Debt

Should I use my savings to pay off my credit card? I have just enough in the bank to cover the debt. What do you think I should do?

Share on facebook
Share on twitter
Share on pinterest
Share on print
Share on email

Your question is a variation on a theme we’ve heard before. The basic idea you’re wrestling with can assume a number of slightly different forms; for example, “Should I pay off my credit cards first or put some money in savings?” or “Should I start saving or giving?” When we get these kinds of inquiries, we usually answer – somewhat tongue-in-cheek – “Yes, of course.” That’s because, from our perspective, wise financial management is never an “either-or” proposition. It’s a question of maintaining balance.

Financial success depends upon good stewardship. And good stewardship, as we see it, is founded upon four foundational planning principles: spend less than you earn, avoiddebt, set long-term goals, and maintain liquidity. Your question sets two of these principles – avoid debt and maintain liquidity – in competition with each other. That’s highly inadvisable, since both are essential to your financial well-being.

Eliminating credit card debt is the surest and highest form of investment return you can make. Not having to pay that interest cost each month is, in effect, the same as achieving the same rate of return on any monies you invest. That’s why freedom from debt is such an important financial goal. At the same time, liquidity – which you can think of as available savings, bank accounts, and other holdings that can be converted to cash quickly – is indispensable in a world where the future is uncertain. An emergency savings fund can spell the difference between bankruptcy and financial survival if an unforeseen disaster arises. That’s not to mention that our society is structured so that the less money you have, the more things cost, and the more money you have (liquidity, that is), the less things cost. So it pays to have a reserve of ready cash on hand.

What should you do, then? Pay off your debt or maintain your emergency fund? We’d suggest that there’s no reason why you can’t work in both directions at the same time. Devise a plan by which you can put some money toward debt payments each month while still earmarking some for your savings account. Make this plan a part of your budget. You may not be able to do everything at once, but you can certainly do a little at a time – a few dollars here, a few dollars there. Daunting as it seems, you simply have to discipline yourself to start small and build gradually. However you arrange it, we think it’s wise to keep a hand on both priorities simultaneously.

For additional help and information on this topic, we’d encourage you to consult the resources and referrals highlighted below. Or if you have relationship concerns and challenges associated with this situation, please don’t hesitate to give our Counseling department a call.


Related Video
Is It Wise to Pay Off Credit Cards?: Ron Blue offers his perspective on the benefits of paying off credit cards.

If a title is currently unavailable through Focus on the Family, we encourage you to use another retailer.

Complete Guide to Faith-Based Family Finances

The Total Money Makeover: A Proven Plan for Financial Fitness

Free and Clear: God’s Road Map to Debt-Free Living

Surviving Financial Meltdown: Confident Decisions in an Uncertain World

Family and Personal Finances (resource list)


Crown Financial Ministries

Dave Ramsey

Debt-Proof Living

Kingdom Advisors

Money and Finances

Breaking Free From Debt

Managing Money

Excerpted from The Complete Guide to Faith Based Family Finances by Ron Blue. Copyright © 2008, Ron Blue. Used by permission.

Talk to a Counselor

Focus on the Family offers a one-time complimentary consultation from a Christian perspective.
Share on facebook
Share on twitter
Share on pinterest
Share on print
Share on email

Thank you [field id="first_name"] for signing up to get the free downloads of the Marrying Well Guides. 

Click the image below to access your guide and learn about the counter-cultural, biblical concepts of intentionality, purity, community and Christian compatibility.

(For best results use IE 8 or higher, Firefox, Chrome or Safari)

To stay up-to-date with the latest from Boundless, sign up for our free weekly e-newsletter.

If you have any comments or questions about the information included in the Guide, please send them to [email protected]

Click here to return to Boundless

Focus on the Family

Thank you for submitting this form. You will hear from us soon. 

The Daily Citizen

The Daily Citizen from Focus on the Family exists to be your most trustworthy news source. Our team of analysts is devoted to giving you timely and relevant analysis of current events and cultural trends – all from a biblical worldview – so that you can be inspired and assured that the information you share with others comes from a reliable source.

Alive to Thrive is a biblical guide to preventing teen suicide. Anyone who interacts with teens can learn how to help prevent suicidal thinking through sound practical and clinical advice, and more importantly, biblical principles that will provide a young person with hope in Christ.

Bring Your Bible to School Day Logo Lockup with the Words Beneath

Every year on Bring Your Bible to School Day, students across the nation celebrate religious freedom and share God’s love with their friends. This event is designed to empower students to express their belief in the truth of God’s Word–and to do so in a respectful way that demonstrates the love of Christ.

Focus on the Family’s® Foster Care and Adoption program focuses on two main areas:

  • Wait No More events, which educate and empower families to help waiting kids in foster care

  • Post-placement resources for foster and adoptive families

Christian Counselors Network

Find Christian Counselors, Marriage & Family Therapists, Psychologists, Social Workers and Psychiatrists near you! Search by location, name or specialty to find professionals in Focus on the Family’s Christian Counselors Network who are eager to assist you.

Boundless is a Focus on the Family community for Christian young adults who want to pursue faith, relationships and adulthood with confidence and joy.

Through reviews, articles and discussions, Plugged In exists to shine a light on the world of popular entertainment while giving you and your family the essential tools you need to understand, navigate and impact the culture in which we live.

Have you been looking for a way to build your child’s faith in a fun and exciting way?
Adventures in Odyssey® audio dramas will do just that. Through original audio stories brought to life by actors who make you feel like part of the experience; these fictional, character-building dramas use storytelling to teach lasting truths.

Focus on the Family’s Hope Restored all-inclusive intensives offer marriage counseling for couples who are facing an extreme crisis in their marriage, and who may even feel they are headed for divorce.