re: Looking for advice on what to do with 12k

If the OP had a job I'd advise paying it off, but since he doesn't I'd hold the cash in reserve. Not in another CD, they just don't pay enough to be worth it right now, just stick it in a checking account for the time being and don't spend it. Put it in a separate account if that helps remove temptation.

Debt can be perfectly fine if the rate isn't too high, after all bankers get rich by borrowing at a low rate and lending at a higher one. 5.5% is a little high these days but an emergency fund is pretty important too.