First question I'd ask is, How stable is that NJ pension? Someone asked whether you might one day want to return to state government, and it'd be nice to be able to step back into that pension plan with a nice bit of savings already in place. IF you think the pension is stable, don't touch it.
Do NOT withdraw the money under any circumstances. Losing 20% off the top is unacceptable, but then in addition to that you'll have to report an extra $28,000 as earnings next year. That'll vault you up into a new tax bracket, taking even more of your money. Better to roll it over.
As for the credit cards, you say you've been piddling around with a balance since you were 18? Dude, that's stupid. Half your life, all your adult life, you've had this sword of Damocles hanging over your head. You've thrown away more than the $28,000 that we're discussing on interest. You're earning a good salary. Just do it. No excuses. Put every penny you have every month towards this balance, and then never get yourself into this foolish place again. No eating out, no movies, nothing for the new house, no whatever you typically spend upon. NOTHING but groceries and your mortgage until this is done. You should be able to knock out 15K in a year -- probably less -- and then you'll be free.
Then start saving.