Ben writes with an interesting predicament, and he hopes GRS readers can provide some guidance. He’s trying to dig out of debt and establish an emergency fund, but which is more important?

I recently accepted an offer for a 0%-for-12-months Citi credit card. (That’s 0% on both purchases and bank transfers.) I opted to get the money in a check, which I intend to disperse to my other cards in the debt snowball method.

However, it occurs to me that I only got in this current situation because I was out of work for a period of time and ran down my emergency fund. The job I have now pays the bills each month but leaves me very little left over to save. Cutting down on my credit card debt will help immensely, but my budget would still be skimming very close to the line.

My question is this: would you recommend the bank transfer at 0% be used for paying down debt, or should I take a portion of it (about half) and keep it in a savings account to restore my emergency fund?

I suspect the answer boils down to: do what works for you. Personally, I’d opt to put $1000 into savings, and then use the rest to pay off debt. Like Ben, I’m curious what others have experienced.

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