Posted on December 23, 2008 at 3:36 pm I have in the past had credit cards and paid them off at the end of the month.  Over the last couple off years I went out on my own and started a business which while it did OK ran up about $43K in credit card debt.  I have since shut down the business and gone back to a salaried job that pays a little more than what I made when I paid everything at the end of the month.  My new job moved me accross the US and I have a house for sale (~$60K equity) which I should realize about $42K in after it sells and real estate fees paid.  In the past 6 months I have managed to pay my CC down to about $38K and not incur any new debt. Should I just wipe out the debt when the house sells? Will there be any tax impications in not reinvesting in a house in my new location (currently renting)?

Posted on December 26, 2008 at 3:50 pm Normally, I would say it's a no brainier and pay off the credit card debt, but it's pretty tough to get approved for a mortgage right now.  I would find out how much the minimum is you'd need to put towards the house to get the new mortgage and use the rest to pay off the cards.  It's better to owe the money at 4.5% on a mortgage than at 18% on credit cards.

Posted on March 26, 2009 at 11:42 am Mortgage rates are a better deal than the higher credit card payments.  So get rid of the debt if you can or at least use some money to pay it down. But transfer the debt to other low interest cards  first to stop the interest rate from compiling too quickly.