Do you remember that commercial about the roach motel . . . roaches check in but they don’t check out? I want you to think of your 401(k) as a retirement hotel. Money checks in but it doesn’t check out (until you’re retired)!

Do not withdraw money from your 401(k) or any other retirement account to pay off credit card debt. Not only will you increase your taxes but you will pay a 10% penalty. Don’t do it. Step away from the 401(k).

Can you plan for “unexpected” bills? Yes and no. While you can’t look into the future to see what the unexpected bills will be, you can set aside some money in a savings account for these unexpected bills. This way you won’t have to charge them even if they come out of nowhere and can stop you from feeling overwhelmed when those situations do arise.

Again, the best way to pay off credit card debt is to (1) cut up all of your credit cards right now, (2) call the credit card companies and ask them to reduce your interest rate or you will transfer your balance to another firm and cancel your card, (3) reduce your living expenses, (4) develop an automatic payment plan for each of your cards, and (5) use bonuses or other big money events to chop away at the debt.

I agree with Robert's answer, except for one detail: Do not cancel your old card(s) if you transfer balances to a new card. That reduces the debt to available debt ratio, and can lower your credit score. For example, if I have $1000 available credit, and I've charged $900, I've used up most of my available credit. Lenders don't like that, because it shows you will use all of your available credit. But, if I transfer my balance to anther card with $1000 balance (but a better interest rate), then I have $2000 available credit with $900 charged - a better ratio. Just don't make the same kinds of mistakes, and charge the entire $2000. The goal is to pay off existing balances without charging more.