hmmmm. I personally would not dip into my 401K to pay off the credit cards. If the house is almost paid for, then allocating what they would have spent monthly on the mortgage is what should be paid towards the credit cards until they are paid off.
The thing is, they need to be really committed to paying them off, else, they will just keep that revolving debt. They have to really want to be debt free, you know?
A very clever man once told me, ‘paying an extra 13% (in their case) for the privilege of using credit, it just stupid.’ What item is so important that we should be willing to tack on an extra 13% just to pay for it?
I am personally a huge fan of American Express. Using it is good because it keeps you honest about what you really can afford. And, they have amazing customer service. I am consistently impressed with their organization.
Your relatives have quite a bit of debt that will only grow if they do not get a handle on it. Whatever you can do to help them would be good. You may have to have the conversation with them a few times.
I believe that anyone with a little debt going into this next recession is really going to pay for it. Credit card companies are increasingly becoming more sophisticated and aggressive, and they have figured out how to grow the balances of card holders very easily. You can imagine if consumer spending slows, the card companies will still be looking for income, and increasing fees, interest, and service charges will only grow in the next few years.
