A risky idea……but now I'm torn.

I was just thinking about the credit card debt I have and comparing it to my savings account. My savings is earning .8%APY, meaning I'm earning .8 of a cent for every dollar in the account. Not exactly a great yield, but that's the current market rate.

Then I think about my credit cards. One of them is with Chase, and the other was with NTB through Citi. The Citi card could not really be used for anything but car maintenance at NTB, but the Chase card could be used anywhere. The Chase card has an APR of 29.99%, and the Citi has an APR of 28.99%. So for every dollar I owe, the credit card companies are getting 29-30 cents!

This almost seems obvious right from the start, but I'm considering using the money I've saved (around $150 at this point since I started setting back 10% 4 weeks ago) to snowball the Chase card. This card could be used as an emergency fund of $500 if it had a zero balance, and then I could snowball the Citi card and use it as a car repair emergency fund. Then perhaps I could refocus on building my savings.

But this is where I'm torn. It's going to cost me less to get these cards out of the picture sooner, by a wide margin. So this approach seems to make sense. But i'm just not sure if it's wise to drain the savings and start applying it to the credit cards. I like knowing the savings is there, but ultimately it's costing me way more to have these cards open than it is to pay them down a.s.a.p.

So I'm not sure what to do here. Should I keep the savings, or should I snowball the fuck out of the credit cards?

I'll listen to any feedback in the form of comments, and I'll consult family to make sure I've made an informed decision, but this is a stumper.

And then again, when I look at the title of this post, "a risky idea....", I recall that the greatest risk shows the greatest reward. This would be risky because I'd be risking being limited to an emergency fund that could only be used at vendors who accept credit cards. This may help my utilities and groceries, but it wouldn't help me pay rent. If I lost my day job Monday, and I've put all of my savings onto the cards, then I have no cash available. But then again, it costs me more money the longer the cards have a balance on them, and I want all of my money to go back to me again.

So I'm stumped.

I'll report back with my decision, but I've got some phone calls to make.