View Full Version : What to do with rebate refunds?


chatterweb
02-27-2006, 11:58 PM
I just go 50.00 rebate, I am expecting 65.00 more, then another 150.00 in a few months. We also are supposed get $1000.00 from supplimental disability insurance company soon...
Our savings account is low ($16000 it used to be $56000)
our credit card debt is high for us ($8600.00)
Should we add to savings or pay down debt that is at 0% interest for another 13 months?
Thanks in advance for any advice!!!

FrugalMomof3
02-28-2006, 12:27 AM
I would want to get rid of the debt first and foremost, then any payments that were going towards the debt can be put into your savings with the usual amount you put in there.

Plus your no longer worrying about paying that debt and you can concentrate more on putting everything in savings.

homesteadmamma
02-28-2006, 12:42 AM
Pay your debt off. Then the money you would have used to pay off the cc can go directly into savings.

guest7
02-28-2006, 08:37 AM
Okay- I'm thinking a little differently here.
If there is 0% interest in debt- what difference does make to pay it now vs 13 months from now (when 0% ends). It's a free loan per se. I would take advantage of it.
Take some of your savings, buy a 1 year CD for what you owe on the cc. (through ING-best rates)
Pay the minimum on cc and save all the extra $$ in a high yield savings account- so you earn lots of interest- while you wait out the 0% period.
When your CD comes up for renewal in 12 months- you can cash it out- with lots of interest to boot. Pay off the remaining cc balance and still have a growing savings account!
The reason I say to tie up the money in a CD is so that you will have the money to pay off the free loan.
Advantages of this- earn more interest. prevents you from charging more (mentally knowing you have a large bill already)
Disadvantages- ease of mind to have no cc debt. but, you might rack up some more debt- once you pay it off.

Just a thought. I know it goes against the -no debt- living, but it's free potential.