<prompt> Human: My GF has 5000 in Credit Card debt assume 18 interest, and 5000 in savings as well as some unknown amount in a 401k.Shes refusing to pay off her CC Debt in one fell swoop, because she says its scary to have nothing in savings.I want to convince her that its still the better plan, because once she zeros her CC Debt, she can get true, optimal growth in her savings. Can you guys help me explain this to her? I think a CC Debt calculator would help to show her, but theres an emotional component here that I want to help her with.  <response>: Its important to realize that a line of credit for 5,000 and 5,000 in cash are not the same thing. At any time the credit card company can reduce your credit limit with no warning. This is part of the reason why rpersonalfinance recommends having a cash savings account, and not relying on a credit card for an emergency fund.Just the other day I saw a comment from a guy saying that his student loan servicer made some screwup not his fault that caused a hit on his credit report. His credit limit was instantly reduced by thousands of dollars.Moral of the story: Cash is always better than credit. Build an emergency fund in cash and then pay off the credit card with income.I generally side with your GF on this one. I understand youre trying to save money on finance charges. But what if she loses her job right after she makes the payment? Cash is safer. If you really want to pay off some of the CC with the emergency fund, use half of her savings account, not all of it.TL;DR: Dont pay off debt at the expense of your emergency fund. I know you want to save money and not pay finance charges, but an emergency fund is important. 