Sell stock to pay off credit card debt?

oc16

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I have about $4200 in credit card debt.

I've read never to sell stock for debt unless it's high interest debt like a credit card.

What do you think?
 

Reincarnated

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Yes. The simple math says the interest you'll pay on that card will outweigh any LIKELY appreciation in the stock in the short to mid-term. Of course there will always be stocks that go on moonshot runs, but you shouldn't be concerned with that while you're carrying bad debt.
 

taiyuu_otoko

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If you plan on holding your stock you can get a much lower interest loan against it and use that to pay off the cc.

Of course if the stock tanks during the loan you won't be able to sell it so you'll be screwed.
 

plumber

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sell the stock, pay the cc. every pay cycle for you, buy some of the stock again. don't add cc debt again.
 

RSDCharlie

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I have about $4200 in credit card debt.

I've read never to sell stock for debt unless it's high interest debt like a credit card.

What do you think?
Dude when you have 4200$ credit card debt, whose interest will keep increasing the more you dont pay it, is your number one priority right now. Stock market can make you profits or losses, but interest will keep on accumulating no matter what happens. Pay it off asap. And then, burn your credit cards off. You clearly have a spending addiction.
 

FlirtLife

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I have about $4200 in credit card debt.

I've read never to sell stock for debt unless it's high interest debt like a credit card.

What do you think?
The S&P 500 has performed well above its historical average recently. I'd suggest you take the win, sell the stock, and pay down credit card debt. In general, credit card debt grows faster than the stock market.

You might want to read up about an "emergency fund", which is cash reserved for unexpected expenses (even living expenses, if you're laid off).
 

BackInTheGame78

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I use my credit card to get cash back and pay the balance off every month. It's free money.

For those who carry balances, not advised...but thanks because you are the ones who find my cash back :lol:
 

sharkfinale

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Try to see if you can take out a low interest loan against your stock portfolio and pay off credit card debt. Keep in mind that you will be able to get only a fraction of the value stock portfolio as loan (less than 50% of market value), depending on the rating that will be ascribed to the different stocks you hold in your portfolio.
 

FlirtLife

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Try to see if you can take out a low interest loan against your stock portfolio and pay off credit card debt. Keep in mind that you will be able to get only a fraction of the value stock portfolio as loan (less than 50% of market value), depending on the rating that will be ascribed to the different stocks you hold in your portfolio.
Vanguard, Schwab, and Fidelity charge 13% for margin loans. Historical stock market performance is about 10%/year. Most likely, selling stock is better than taking a margin loan. There are places that charge less for margin loans, but pursuing that route ignores the risks of margin loans. Margin loan agreements give the broker the right to sell your stock to cover the margin loan.

In my view, someone in credit card debt who hasn't built up an emergency fund should not be messing with margin loans.
 

FlexpertHamilton

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Or just don't pay the card and let it go to collections where it won't get any more interest. But bro $4200 is nothing can't you just pay that off in a few months of saving?
 

Bible_Belt

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There are "suitability" rules that they don't enforce any more, which state that you basically shouldn't be allowed to purchase a speculative security if you could not easily afford to lose all the money. When I was a broker, I refused a $25k check to open a new account, because it was a cash advance check from a credit card. It was legit in the sense that the guy had great credit, but if you have to borrow the money, it isn't money you can afford to lose.

Also, when you pay off the credit card, your score should go up. You can make it go up more by calling the card company and asking them to raise your limit *after* the balance has been paid off. Credit is easy to get when you don't need it, and on paper you want to look like someone who has a lot of it, but doesn't need to use it.
 

Vanderdonck

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There will always be a stock market to invest in. Pay it off. $4200 is nothing. At one point I had nearly $40k in cc debt. I got serious and reduced it year by year. When I got to the last 6k or so I paid that in one payment as I also had some savings. Poof, gone.
 

MatureDJ

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You don't want to hold a stock position while at the same time paying through the nose for CC debt - unless you planning on filing for Chapter 7 bankruptcy. :)
 
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