Is it worth it to keep a savings account that I pay into every month automatically vs putting that money towards paying off a credit card with 20% intrest? Seems stupid to have a savings account when I'm am just throwing away money on intrest making the savings actually cost me money. Does a savings help with a credit score? Any benefits to keeping it open?

pay off your credit card debt first

They don't really help IMHO unless you do this. Take half of your savings go to a credit union ask for a personal line of credit for half of your savings. Take the loan and then deposit it right back into your loan account, or do it piecemeal but don't spend the money unless you are sure you can pay it back.

do you have an emergency cash reserve of at least 6 months...?

depends.

i would agree that paying off high interest debt is better than sitting on that cash from one point of view, but i keep my savings account for incase i wound up without a job and could make a few months house payments out of that.

duh!

Fixed.





baby steps. Learn them. Live them. Love them.





A savings account does not help your credit. It's not credit. Nor does keeping a balance on your cards help either.



20% is such a monumentally high return on investment (especially as it's after tax) that I'd stop everything to get that paid off.





 

I don't have very much saved up. I also don't have a ridiculous amount of debt. I'm just trying to get a clean slate. The only thing keeping me from a good credit score is the amount on my credit cards(2). I have already started by getting rid of the cards and making bigger payments each paycheck.

Pay off the %20 credit card no matter what.  If you have a savings withdrawl requirement like a car breaking down then charge the card back up.

Savings accounts are for unexpected things.  If you can't afford one then credit cards are the next best thing.  Using a credit card for emergencies is a responsible use in my opinion.

This.

You could post details of what is not "very much" and "ridiculous amount" mean :-)



If you have two cards and pay one off and then close it, your available credit will decrease and as such your percentage of used credit will increase to the detriment of your score.





e.g. Two cards with $5000 limits. One has $4000, the other is maxed at $5000 So you are using 90% of your available credit - which is bad juju. You pay off the $4000 and close it. Now you only owe $5000, but that's maxed out your available credit, so now your credit socre gets a worse hit becuase you are maxed out, instead of having 50% available.





But that's OK, because you're never going to want credit ever again. Except maybe for a house, and that can be fixed with 20% down and manual underwriting.





 

I run enough cash in checking to cover my expenses though the month + 10%,  enough in savings for budgeted expenses for 2month + 10%,  and enough in a money market for 6 months +10%.   Any surplus cash gets tossed into the MM and from there into long term investments.

Read Dave Ramsey. Pay off your smallest debts first, work up to big ones. Then start putting money into savings. You are correct about losing money not paying off 20% interest CC.

Trust me, I went crazy with the plastic money right out of high school.  Living at home, working part time and going to school.  No bills to speak of.  Charge it up, month or 2 goes by, pay it all off.  Do that a couple of times and they up your limit.  By the time I got married at 24, I had close to 50k in cc debt.  All of a sudden, wife pregnant, married, had rent and utilities to pay, my check didn't stretch that much.

I am now 38 divorced  and haven't had a cc in almost 20 years.  Mortgage is my only debt to speak of.  (Parents had to help with that loan)  2002 Tacoma paid off(bought new at 18% interest.  That sucked)  

Pay the credit card off fast.  Then hide them someplace and forget about them.  If you need an emergency flight home, or a major vehicle repair, then use them.  Do not cancel them, because no credit sucks almost as bad as bad credit.