Been pondering a question, maybe someone could help...would it be better to take money from savings in to pay the card off in hopes of replenishing savings, or should we just keep plugging away at the credit card assuming the small amount of savings is going to get grabbed by the depression?
From a strictly financial viewpoint if the interest rate on your credit cards are higher than the interest on your savings account then you should pay down that debt. And since interest on savings is bascially zero and credit card companies are now pretty much worse than loan sharks I'd pay down the debt and start saving again.
is the monthly credit payment a significant amount? If you paid the card off, could you replenish savings quickly with monthly deposits equal to the old credit card payment? do you have the discipline to make those payments to yourself (your savings account)? is everyone employed securely? is your food storage program well underway?
A compromise would be to pay half the card off, then still pay at the higher old payment rate instead of the newer lower payment rate until it's paid completely. This frees up a good portion of your credit line in case of a real emergency. Once the credit card is paid off completely continue to make the same dollar amount payments to your savings account until it is replenished. 50% of any windfalls (cash birthday gifts, store cashback rebate checks, refund checks) also should go into the savings account. Good luck!
My suggestion is to draw down your savings to pay off a credit card, but only if you have at least 4-6 months worth of expenses saved set aside already. That money should not be touched. If the stuff hits the fan and you have to decide between eating and paying off the credit card, you may have no choice but to default on the credit card loan and use every penny to pay your living expenses.
Is your savings paying more than the credit card? If not, pay off the card with non-retirement savings.
If your savings is paying more than the credit card, take the card to the max and put it in savings. :)