Part of any sound debt relief strategy is having an emergency fund—a place to put money to handle unexpected expenses without adding to your debt burden. Depending on your plans, you may want to have as much as three to six months’ living expenses in your emergency fund, but it may not be wise to wait until you have that much saved before you start reducing your debt. One strategy is to put a modest amount, say $1000, in an emergency fund, and then put as much money as you can toward your outstanding balance(s) until you can go back to building your emergency fund.
Can a CD Be Used for Credit Card Debt Relief?
A certificate of deposit (CD) can be used for debt relief, but be sure to compare different types before committing. For example, if your CD charges penalties for making an early withdrawal, using the money for emergencies might be a problem unless the penalties end up being less than the interest you'd expect to pay by taking on more debt. On the other hand, consider the Ally Bank No Penalty CD, which gives you a great rate and flexibility. The Ally Bank No Penalty CD allows you to withdraw all your money, including interest earned, without any penalty, any time after the first six days following the date you fund your account.
Of course, every situation is different, and it definitely pays to know your options before you commit to something that doesn't fit your debt relief strategy. Whatever you choose, you can count on us for products that help you make smart financial choices.
Learn more at Allybank.com or call live, 24/7 customer care at 877-247-ALLY (2559).
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