<prompt> Human: I am 1000 away from paying off a credit card thats been carrying a balance for years. I only recently achieved a 1000 emergency fund. Its at 1100 and change right now and has been for a few months; after it hit 1000 I turned off the automatic transfer and diverted it to the credit card instead. The card is down from 4000 to 2500 so far this year and there is 1500 sitting in my checking account that Im about to throw at the card and cancelling a planned purchase that Id been looking forward to because I think the paid off card will bring me more satisfaction.I could pay off the credit card today with the emergency fund, but then the credit card itself would have to serve as my emergency fund. Im on a relatively fast pace at debt reduction lately and could easily replenish the emergency fund in the next few months, or I could leave it alone and pay off the card in the next few months, just paying a little more in interest. Psychologically I would feel better crossing a balance off my list and eliminating a monthly bill and an interest charge. Is this an OK thing to do or an inherently poor financial strategy? Edit: I decided to go the opposite direction. Not only did I leave the efund in place, I also paid the card down by 500 less than I was originally planning to in order to leave more of a buffer in my checking account as a whatever fund. I modified my ongoing budget to pay the card off in the next two months and then focus on the last remaining card or maybe a home equity to refinance that and some other debts to a low rate. Assistant: Keep the starter emergency fund at 1000, you may need it. Then just work hard on paying off the credit card. The lost interest will be minor since its only 1000 and youll have it paid off soon.Then you can build a 3 to 6 month emergency fund.Human: I have to admit that I dont fully understand the premise behind the 1000 emergency fund. I usually keep close to that amount in my checking account to cover future bills in the next month. Any emergency that I could pay for with a 1000 emergency fund could go on a credit card or come out of my checking and just go to a less severe emergency of being a few weeks late on another bill. I cant really wrap my head around essentially paying interest on that money to keep it sitting. I totally get a 3-6 month emergency fund to cover job loss etc. I just dont see how 1000 makes that big a difference... and if it does I can rebuild it quickly. My job is very secure at least through the end of the year, and I am in very little danger of that changing; and if it does 1000 wont make that much difference.  <response>: Part of the idea is to break the habit of using debt to solve problems and people slipping back in to old habits of using the credit card and then running up debt again. But also, credit cards or HELOC or whatever can be revoked or have their limits decreased. This happened to a bunch of people who were current on their bills during the 2008 credit crisis when the banks were running around with their hair on fire. The cash in the emergency fund is always accessible. 