Should I pay off credit card debt with a financial windfall? What to do with extra money.

Credit cards can add value to your life with their lucrative rewards programs, exclusive travel credits, trip insurance, and more. While they have perks, it’s also dangerously easy to get carried away with credit card spending. Overspending on your credit cards could make it difficult to keep up with payments and the rising interest costs on your balances. You're not alone if you find yourself burdened with high credit card balances. Credit card debt ballooned to $1.21 trillion in the United States in the fourth quarter of 2024, according to Federal Reserve data. While ballooning debt is a big concern, sometimes life takes a surprising turn, and you end up with a surprising financial windfall.What is a financial windfall? A financial windfall is a sudden, often unexpected influx of cash. It could come in the form of a big tax refund, inheritance, lottery winnings, work bonus, or other surprise income source. While no specific threshold designates a financial windfall, these wins can often amount to thousands of dollars. While it may be tempting to spend a financial windfall on a vacation or another big purchase, using all or a portion of it to repay your credit card debt is often worthwhile. Related: 8 smart money moves to make with $1,000Should you pay off credit card debt with extra money? Apart from predatory loans, credit card debt is among the highest-interest ways to borrow money. That's why paying off your credit cards with a financial windfall can be a smart m…