It always amazes me that people want to invest their money in stocks when they are carrying credit card debt with double digit interest rates. Except for a few people that credit card arbitrage, almost everyone is better of investing their money into paying off their credit card debt than trying to invest somewhere else. There is a simply way to determine this by asking five simple questions:
- What is the risk?
- What type of return can you expect?
- What type of tax implications are there?
- What type of fees are there?
- How long until you receive your return?
When you place these five questions to any investment you are considering making and also to paying off your credit card debt, the advantages of paying off of credit card debt become crystal clear.
While paying off your own debt may not be as sexy as other financial options, it’s usually the one that will help out your bank account the most.