**I’d generally keep the IRA and pay down the card from income—especially if you can temporarily reduce 401(k) contributions above your employer’s match.** Your proposed withdrawal has a substantial cost and would still leave some debt.

Assuming this is a fully pretax traditional rollover IRA, you’re under 59½, and no exception applies, the withdrawal generally incurs income tax plus a 10% early distribution tax. Paying ordinary credit card debt does not itself qualify for an exception. [IRS withdrawal rules](https://www.irs.gov/taxtopics/tc557)

Using your estimated **35% combined marginal income tax rate**:

| Item | Amount |
|---|---:|
| IRA withdrawal | $3,500 |
| Income tax, 35% | −$1,225 |
| Early withdrawal penalty, 10% | −$350 |
| Available for debt repayment | **$1,925** |
| Credit card debt remaining | **$1,075** |

Your arithmetic is right. Confirm that 35% is the rate applicable to this additional income; withholding may differ from your final tax bill.

The main things you’re missing are:

- **You’re accelerating taxes and paying an extra penalty.** A pretax IRA would ordinarily be taxed when withdrawn in retirement, so the entire $1,575 isn’t an additional lifetime cost. The $350 penalty is an extra cost, and your retirement tax rate might be lower. [IRS traditional IRA tax treatment](https://www.irs.gov/retirement-plans/traditional-iras)
- **You give up future growth.** As an illustration, $3,500 growing at 7% annually for 30 years becomes about $26,600 before withdrawal taxes. That’s a hypothetical return, and future dollars have less purchasing power.
- **The account’s inactivity is fixable.** Check its holdings. An IRA can hold cash or investments; existing investments can grow even when you make no new contributions. If yours is sitting in cash, you can choose investments within the IRA. Your statement should identify the holdings. [SEC guide to account statements](https://www.investor.gov/better-understanding-your-brokerage-account-statement)

Given your ongoing 401(k) contributions, I’d first consider keeping enough contributions to receive the full employer match and temporarily directing contributions above that level toward the card. For a traditional pretax 401(k), reducing contributions by $500 would increase take-home pay by roughly $325 under your assumed 35% marginal rate.

For perspective, **$3,000 at 25% APR, paid at $300 per month, takes about 12 months and costs roughly $400 in interest**, assuming monthly interest and no new charges or fees. Your actual APR and repayment capacity determine the comparison.

You could also ask the issuer for a lower rate or evaluate a promotional balance transfer, including its fee and expiration date. [CFPB guidance](https://www.consumerfinance.gov/ask-cfpb/what-do-i-need-to-know-if-im-thinking-about-consolidating-my-credit-card-debt-en-1861/)

**What’s your card’s APR, how much can you pay monthly, and are your 401(k) contributions above the amount needed for the full match?**