Hi all. I have an emergency fund in a MMF at 3%, with currently $21,000 in it. For me that is safely and conservatively 5 months of expenses with wiggle room (probably closer to 6–my bottom line expenses are $3500/month all-in). I have a credit card with $5200 on it (one sizeable home repair and one $3k vet bill from just last month). It's currently at 0% interest which is about to end.
- Option 1: Pay off the card in its entirety immediately. That leaves $16,000–or only about 4 months of an emergency fund. I could replace the amount with my income in about 3 months.
- Option 2: Transfer to my other CC currently running a 0% interest for 9 months promo and a transfer fee of 4% ($208) - currently $0 balance. I would have to pay $600/month pay it off in 9 months.
I'm leaning toward taking out the cash and paying myself back, since I can replace it in about 3 months. I'm not at all comfortable with having only 4 months of expenses, but I am more comfortable with having to save than having to pay off debt. I was aiming for a goal of $25k in my MMF by the end of June (now will be the end of the summer).
Thank you :)
