What should I do with my tax return?

Pay off credit cards first. that's easy. Start with the card with the highest interest rate.

Pay off your credit card. Otherwise that $1,300 is actually costing waaaay more by the time is paid off.

The interest rate on the credit card is much higher than the savings account.

As long as you can be disciplined enough not to run up the card again, I would pay that off.

I'd use half or more towards the CC debt, as much as you can. CC debt is recurring and over time it's just costing you money in interest that it doesn't have to! I know it stinks to see it just waste away like that. If you are concerned about an actual emergency and have no savings then guess what - that CC will still be there to use for that! It's a known fact that you will have to keep paying for the interest on that card until it's paid off but it's NOT a known fact that some kind of emergency will happen in the near future.

It would be the best thing to pay off the credit card as you are paying interest each month but you have to make sure you don't just keep charging and not pay the balance in full each month. Put the other 100 into savings, now set your goal to put the amount you were paying on the CC into savings and don't allow yourself to charge items you don't have the money for.

CC accrue interest. Pay it off.

Thanks to everyone for the answers! It definitely helped me make up my mind to pay off the card and get this out of the way

i like trains

Bite the bullet and pay some interest. If you put all of the $ toward the cc bill, but then cannot make even the minimum payment some month, your credit will really be screwed. Figure on paying $300 a month for the next 4 months while your savings builds up and your cash flow stabilizes. <- that is the important part. [[ Also, money in the bank can earn its keep it it prevents you from paying fees, overdraft fees, etc. A late rent payment fee will cost more than the interest you pay on the cc bill. Think big picture. ]]

{Being in a kind mood, I did not thumbs down anyone (but you - to get your attention.}

In the meantime, change your W-4 at work so that you bring home an extra $100 a month instead of accruing interest all year at 18% awaiting your tax return to pay it off. {Used wisely, a cc is a great tool.}