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With credit card interest rates hovering near historic highs — they're — it's no surprise that many cardholders are struggling to right now. Not only does the average cardholder currently, but the total amount of credit card debt nationwide , indicating how pervasive this issue has become. And, issues with inflation, job instability and rising living costs have only made it harder to keep up. 

So, if you're carrying a balance month to month, you might be scrambling for solutions — and may even be eyeing the money in your 401(k) as a lifeline.

On paper, it seems to make sense: Why keep letting the when you have thousands of dollars sitting in a retirement account? But while tapping into your 401(k) to get out of credit card debt may seem like a good idea, is it even possible to do that? Your 401(k) comes with big borrowing restrictions, after all, so before you start banking on that account to help you get out of debt, there are a few important things to know.

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Technically, yes — you can use your 401(k) to pay off credit card debt. However, . You have two primary options: a 401(k) loan or a 401(k) withdrawal.

Some employer-sponsored retirement plans let you borrow from your 401(k) and repay the funds with interest over time. You're typically allowed to borrow , whichever is less. This may sound like an appealing option since you're essentially paying yourself back when you borrow with a 401(k) loan, and the interest rate is usually much lower than credit card rates.

That said, there are risks. If you leave your job (voluntarily or not), the loan typically becomes due in full. If you can't repay it within a short time frame — usually 60 days — it's treated as a distribution and taxed accordingly. Worse, if you're under 59½, you'll likely on top of regular income tax.

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Taking the 401(k) withdrawal route involves pulling the money outright from your retirement savings with no strings attached, meaning you don't have to pay it back. That can make a withdrawal sound appealing compared to a loan, especially if you're struggling financially.

However, than a 401(k) loan overall. For starters, early withdrawals from a 401(k) before age 59½ come with that 10% penalty, and you'll also owe income taxes on the amount. So if you withdraw $30,000, you could lose $10,000 or more of that to taxes and penalties, depending on your income bracket.

In both scenarios, the real loss is the compound growth you're giving up. Using that money to pay off debt now might solve a short-term problem, but it can drastically reduce your future financial stability.

Before tapping into your 401(k), it makes sense to explore that won't jeopardize your retirement security, like:

While you can use your 401(k) to pay off credit card debt, the real question is, should you? More often than not, the long-term financial damage outweighs the short-term relief of taking this route. Between the taxes, penalties and lost growth potential, you could be setting yourself up for major issues in the future, even if it fixes your immediate debt issues.

So, before touching your retirement savings, take time to evaluate alternatives like debt consolidation, credit counseling or even debt settlement. When tackling debt, tapping into your 401(k) should be a last resort, not a go-to solution. After all, your future self deserves a shot at financial stability, too.