If you’ve got high interest credit card debt,then probably it’s a good idea to cash in your RRSP, now we don’t say that lightly.
Very generally, we don’t try to take money out of an RRSP. When we take money out of an RRSP, we’re going to face tax on the amount that we withdraw, and not only that but we can’t put it in again.
In other words, you’d have to generate additional contribution room to be able to fund that RRSP again.
That being said, if you’re paying interest of 19-24 percent, and that interest is of course, non-deductible, because it’s personal debt…
Probably the best investment that you can do is to actually take that money our and pay down that debt.
That being said, it really depends on a number of factors.
It depends if you’ve exhausted all other sources to minimize that debt.
Is there a way that you could perhaps refinance that debt, maybe by getting a secured line of credit, at a lower rate, to use to pay off that credit card debt?
The best thing to do is speak to a financial adviser, look at your entire situation, and he or she will determine what the best plan for you is.