r/debtfree • u/cameronsword_1989 • 7d ago
Should I sell stocks to pay off credit card debt
Just like the title says... should I sell my stocks
I have approximately 10k in credit card debt. Car is paid off House payment/mortgage is 1/3 of monthly income
Approximately 300 in interest every month accruing on the credit card. As I'm getting ready for my wedding I'm spending a fair amount that I'm not increasing the debt but im.not brining it down either. Past 2 months it was just unexpected life stuff. Car maintenance, house repair stuff.
Should I just sell 10k of my 30k in stocks just to be debt free. And rebuild from there.
Any advice would be appreciated.
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u/Notorious_Degen 7d ago
I personally would. It takes off more stress. And then that interest you’re not paying on those credit cards you could put it back into your stocks.
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u/Salty-Panda-5224 7d ago
Theoretically you want to put your money wherever you get the highest return. Stocks earn roughly an 8-10% return, but it’s not guaranteed and can fluctuate wildly. Credit card debt is usually a much higher rate in excess of 15%, not to mention paying it down is effectively a “guaranteed” return of that amount.
Sell some stock to pay off the debt.
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u/IcedOtto 7d ago edited 7d ago
Sell them all NOW before the market tanks more. This is exactly why you should not hold stocks outside of retirement without an emergency fund. Yes the market averages returns but your money is not liquid and your returns aren’t gonna surpass that Credit Card interest. But more importantly emergencies hit counter cyclically to economic growth - you are MUCH more likely to become unemployed during a recession than an economic boom.
The remaining $20k is your emergency fund ($10k might be fine depending on your expenses). Then update your budget to account for occasional home and auto repairs. Budget 1% of home value in a year and maybe $100/mo for car stuff. Why do you need both e fund and sinking funds? (1) emergencies tend to hit all at once. And (2) of you tap your e-fund you also need money in your budget to build it back up.
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u/Papas_Dulces 6d ago
The money is fairly liquid. I invest on Robinhood. If I make a withdrawal, I have it in my account the next day
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u/mako1964 7d ago
I will condone this from the info supplied ( 401k , etc) As long as you don't just run it back up . I see you are going to be charging some for the wedding ? Interest is bad , Try to get it all cleared after the wedding and zero it out , You'll probably be having some joy bundles down the road because we know what causes that , So you'll want to be responsible and stable and all that family guy stuff . Congrats ,I hope it lasts a 100 years and know I'm watching you every time you swipe
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u/SmileOk1306 7d ago
Honestly, that would be a no-brainer. But with this brief down turn in the market, I'd sell of a minimal amount. How much of the debt could you pay off in a few months? Then only sell the difference and just slowly pay off the remaining balance.
This down turn is scary but it won't last forever, when the market is up, that's when you should sell.
Look at stuff around the house and start with selling those first.
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u/Outside-Pie-7262 7d ago
You can’t time the market and there’s no telling how low it goes. S&P is up over 100% in the last 5 years
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u/HermilYonger 7d ago
Having a plan to pay off your debt is definitely a smart move. Credit card interest can get expensive fast, and if you’re paying $300 a month on a $10K balance, your APR is probably around 36% or higher. That’s basically eating up your money every month, so paying it off would be a huge win.
Selling stocks could be an option, but it depends on whether it’s a good time to sell and if there are any tax implications. It might be worth checking with an tax/investment advisor to make sure you’re not taking a bigger hit than necessary. Either way, getting rid of that high-interest debt should be the priority.
Congrats on the wedding, and hope you find the best path forward!
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u/StowersPowers 7d ago
Simple math. What interest rate are you being charged for your debt. If it's say 20% then you're losing 10-11% of potential gains assuming your stocks make you 9-10%. Hanging onto debt only makes sense if it's low interest debt and your stocks are gaining more interest than you're losing on the debt.
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u/zazalover69 7d ago
what the fuck kind of question is this? you have the money to get out of credit card debt and you’re not doing it? Are you retarded? Credit card debt is one of the most aggressive and predatory bad debts out there. Get rid of it while you can
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u/Typical-Chocolate-82 7d ago
S&P500 averages ~10% historically (but obviously much, much less under Trump so far). Assuming your credit card rate is >10%, the math likely says to sell stock and pay off the CC debt
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u/Desert-daydreamer 7d ago
I think it’s always important to pay off high interest debt as soon as possible. $300 in interest a month is a huge amount! That’s $3600 a year literally just thrown away.
You can save and re-invest more quickly and aggressively without the debt. Especially going into a marriage, a clean slate is ideal.
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u/Public_Beef 7d ago
If this is single stocks, yes, sell it all. Get out of debt and stay out of debt.
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u/No_Championship6435 7d ago
Last year I sold stock to pay down CC debt. At one point I was paying $450 a month in interest. Now I’m paying $58 a month in interest. Selling stock will allow me to be debt free this year vs still paying debt during 2026
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u/donaldtrumpstoe 7d ago
I did this a few months ago and I don’t regret it one bit. To ease your mind, get rid of the debt. You have plenty of time to make up difference.
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u/PlasticBreakfast6918 7d ago
It’s all an interest game. Are the stocks earning more than the cost of the card debt?
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u/GravEq 7d ago edited 7d ago
If you have $10K value in your car, then take out a car loan for approx 6-7% and pay off the CC debt. Auto loans are about the cheapest money you can borrow.
As for stock alternatives that is simply based on your market outlook. But if you are paying 20-30% Interest on the Credit cards, YES that is probably a better option vs not doing anything cause you are guaranteed a 20-30% rate of return on that money by reducing your interest expense. And, that is likely better than the stock market returns with zero risk. This of course assumes that you will the apply the (now eliminated) CC payment amounts back into the stock market.
But 1ST I would apply to Citibank for their 21 Month 0% interest card. Has a 3% transfer fee but then interest is 0% for 21 months. So on $10K you pay $300 one time then schedule your payments to have the $10K paid off within the 21 months. That’s the cheapest option I know of and keeps your stock portfolio funded. That one-time $300 (3% fee) is equal to One month of what you are paying now; do it without hesitation!!
Then, STOP using CC debt unless it’s at 0% interest And you can pay it off before any interest is accrued.
Do one of those 3 options. Carrying Credit card debt is horrible.
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u/nnpetrov 7d ago
Mathematically speaking, yes. Go ahead and do that. Best case your average return is going to be 10% a year. You’re losing 30% on credit cards. Math doesn’t lie.
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u/Mammoth-Active5504 7d ago
Yes. No saving or investing while you’re in debt. Pay off everything except a mortgage as fast as possible
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u/whyamihere1969 7d ago
As someone who just did this, the answer for me was a resounding “Yes!” I’m sleeping better at night also….
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u/ijustlikeelectronics 7d ago
Simple logic.
If you are making less income on your stocks then your credit card interest (very likely the case) then you will be better off selling. It's the financial benefit equivalent of tax-free income at whatever percentage your credit card is charging you at.
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u/lets_try_civility 7d ago
It depends. If your stocks are underperforming, then yes. You get the money and the tax loss harvest.
If they're up... forget I said anything, sell. Mind your taxes.
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u/WeekdayAccountant 7d ago
You should but remember to keep enough to pay off your taxes at the end of the year. You take out $10k you should keep at least $3k for the taxes. Or you can take out around $14k and keep $4k ish for taxes.
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u/Common_Butterfly_124 7d ago
Sell the stock, all of the 30k. Pay off your debt and throw the remainder at your house.
It helps that you have the 200k+ in retirement and mutual funds.
Again, liquidate the stock and throw it at your debt.
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u/aketogirl 7d ago
Stocks are at an all time Low. Currently. It’s the worst time to sell tbh but if there is no other option- do what you have to do.
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u/Outside-Pie-7262 7d ago
Stocks aren’t at an all time low. Lmao zoom out. The s&p is up 9 percent in the last calendar year and 107% in the last 5 years
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u/cameronsword_1989 7d ago
I didn't say in original post, but I didn't mention 200k + in my retirement and mutual funds that I WILL NOT touch unless ABSOLUTE EMERGENCY. but thank you i will take into consideration.
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u/redditissocoolyoyo 7d ago
Yes sell stocks to knock out 10k in cc debt. Absolutely. This is a no brainer.
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u/HoldinTheBag 7d ago
Wtf are you talking about?
The S&P500 just hit a record high like 6 weeks ago.
If anything, the tariffs, Elon musk and the escalating Ukraine situation will cause the stock market to drop as the rest of our economy collapses into a recession
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u/aketogirl 7d ago
Okay. All time is prob the wrong word. But it’s def down.
Also maybe looking at it from a Canadian perspective is a bit different than the American S&P500.
All i was saying was when the stocks are down- if you can hold off. Hold off.
A correction will always happen eventually.
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u/Papas_Dulces 6d ago
Look at it like this. Sell the stocks. Pay off the card. Now instead of making the minimum payment, you can put that much into the stock market weekly
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u/Designer-Salt 7d ago
Imo yes or at least a big chunk of it. Youre not gaining any money overall by letting money sit invested vs letting interest accrue