Credit Advice

Isn't there a penalty for early withdrawl to the tune of 10%? What are your interest rates at? How long do you have before you pay it off? 

  There is a 10% penalty although I need to consult a tax advisor since I have read that when you turn 55 you can get the penalty waived if you withdraw retirement funds in equal payments over the course of x nbr of months/yrs.  I have a line of credit with a payoff of $10,000 and apr6.750. I have a mastercard w/ balance of $5,981.25 and apr 5.750. I have a Lowe's credit card of $2100.00 with an apr of 16%.  It seems like i'm not making any headway on these loans, as I've been in this situation for quite awhile. I have a daughter that is in college and diverting any 'extra' funds I can use to double my payments on these accounts.  I have another daughter that will start college in 2 yrs that I am trying to save money for as well. I thought if I could pay off these loans, I can re-build my savings account in lieu of making these monthly payments w/ interest. 

Tapping your 401K should be a last resort. May I suggest, paying the minimum on everything else and applying all extra payments to the Lowes card. That should melt away quickly. Then apply all extra payments (including all you were previously paying to Lowes) to the line of credit.

Yes, I have considered following the 'snowball'  approach, but I need a quick fix for other reasons too complex to get into here. My brain says don't touch the retirement fund, but my needs tell me otherwise. I definitely won't be getting into debt again.  The question is which approach provides the most relief now, and is best in the long run?

No, I don't mean the snowball method. Right now, you're being charged about $56 in interest on the $10,000 line of credit, $29 on the Mastercard and $28 on the Lowes card, every month. (These are rough estimates, considering only apr and principle.) If it were me, I would apply all of my excess payments to the line of credit, since that's where the most money is being lost, get that down to about $5,000, then apply all extra payments to the Lowes card, and switch back to paying excess on the line of credit when the Lowes card is paid off. The snowball method is simplified to work for a greater number of people. It works great, but I've taken 10 credits of calculus. I've calculated paying my debts in that manner as opposed to applying the calculus to find out where the largest loss is coming from, and I think my method is more economical, though time consuming. The amount you're losing in interest changes based on your balances, and other variables, so it's hard to describe on message boards.