As the economic downturn continues, clients who are retirement plan rich, but cash poor, will more frequently use 401(k) debit cards to pay for bills they can’t quite manage with regular income. But as with all credit options, clients who misuse these cards may be asking for trouble.

According to the Securities and Exchange Commission, 401(k) debit cards allow consumers to conveniently borrow up to $50,000 or 50 percent of the value of their retirement plan. But many consumers forget that like a traditional credit card balance, 401(k) loans must be paid back … with interest.

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