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Soggy_Celebration814 t1_ja6bj4b wrote

first calm down. You can’t find a way to deal with it without sanity.

second, your financial management is not quite right… not sure why you put money into 401k given your cc rate is 20%. Can your 401k brings you any higher than 20%?

possible solutions, get a 0% intro apr cc And transfer balance to that card. Try your best to pay off the 0% card however you can! Selling car or get extra job or 401k withdrawl or borrow from friends. Key point, lower your rate!!!

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molybend t1_ja9eh7j wrote

401K accts often come with an employer match that makes it worth doing as long as you can pay the minimums on your cc. Also, if you are still employed, you can often take out a loan from the 401K balance. Doesn't help OP now, but those are reasons people do 401K and have cc debt.

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Soggy_Celebration814 t1_jaaldsf wrote

I see. Then suppose you put x dollars into 401k, they match another x dollars. Can you withdraw the 2x dollars to pay your cc first?

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molybend t1_jaamv4l wrote

Early withdrawals on 401k accounts are subject to a ten percent penalty in most cases, so no. The flowchart says make the minimum debt payments as part of step 0, then get the 401k match (step 2), then pay off high interest debt (step 3) before going back to 401k (step 5). There are other steps, but in this case those are the relevant ones.

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