Pay off debt or just minimum payment

[Lindahfx]

I was laid off of my job 2+ weeks ago but am being kept on a special project for the next 4 months or so. My DH and I are trying to cut back on spending and save as much as we can for the next few months in case I won't have a job after I complete the project. Our money is very tight and will be extremely tight if I don't have a job and need to go on employment insurance.

My question is this: I had charged a number of healthcare related items and a flight for work prior to the layoff on my Visa. I have received an expense cheque for the flight and will be receiving my health insurance refund soon. Should I A) pay off the cc with the refunds I receive or B) keep the $$ and just pay the minimum payment on the cc?

Thanks for your help.

[disneysteve]

I would pay off the CC. If it comes down to it later, you could always use the CC to pay for necessities when your EF runs out.

[boosami]

Agreed. Pay it off while you can so there's no possible way you can be stuck with it after the 4 months are up.

[jIM_Ohio]

Pay it off.

Keeps your credit line open and available.
Lowers your expense footprint

I would look for a part time job now- 5-10 hours per week, and stash that cash. You might be able to increase hours if you do get laid off.

[creditcardfree]

I agree pay it off.

[Tree0164]

Pay it off for sure

I would try to see where you can cut down expenses otherwise

[Lindahfx]

Thanks everyone... I will take your advice and pay it off.

[Russell]

OK, I'll disagree with the general consensus because it really depends on what kind of interest rate you're paying. If it's low enough I'd hang on to the cash. I figure in the end you really just need a roof over your head and food on your plate to survive, the rest takes the back seat. What I mean by that is make sure you have money for food and housing first. A lot of credit card companies are lowering the credit limit to people's current balances despite good credit and having no prior history of late payments. So I wouldn't count on credit cards to be there when you really need money...if they're there great but cash is king these days and I'd preserve it.

[swanson719]

If cash is king, it would make more sense not to pay finance fees and save that extra bit of cash. Pay it off, add what you can to your EF, and have DH work evenings delivering pizza. Pizza hut pays drivers $10/h in most suburban areas, not counting tips.

[Angio333]

Pay it off.

Keeps your credit line open and available.
Lowers your expense footprint

I would look for a part time job now- 5-10 hours per week, and stash that cash. You might be able to increase hours if you do get laid off.

This is great advice.

[bjl584]

A little off topic, but I see that you charged healthcare costs on a credit card, and that you live in Canada. I thought that medicine was socialized in Canada? Would you mind sharing what you had to charge on a CC?

[DebbieL]

I too am in Canada. I pay $54 monthly for MSP (medical services plan) here in BC. Some provinces are free, others have a small fee (like mine). She may be talking about expenses that aren't covered under our basic medical such as prescriptions (if she doesn't have extended medical through her job, she has to pay for prescriptions out of pocket - and while they are cheaper here in Canada, some of them are still pretty pricey), or dental work (only emergency dental procedures are covered unless you have a dental plan through your job). Basic dental care is only covered if you are on welfare.

[autowoman]

I personally love paying off rather than stretching it out. So I guess it depends on what brings you the most relaxation. Even paying half off feels good if you can.

[Lindahfx]

A little off topic, but I see that you charged healthcare costs on a credit card, and that you live in Canada. I thought that medicine was socialized in Canada? Would you mind sharing what you had to charge on a CC?

In this case I am talking about physiotherapy and massage therapy for an injury I have. I have private health insurance does cover these costs up to $500 per service per year... but my health insurance company doesn't pay direct to the service provider so I have to pay it up front and then claim it. So I've paid for it via a cc. Then when I receive my reimbursement from the insurance co. I pay off my charges to the cc.