Retire Credit Card Debt First

If you’re struggling to decide whether to contribute funds to your retirement or pay down your credit card debt, I have some advice. Think of your retirement like you would a house and the credit card debt as a hole that’s in the middle of your property, before you can build your house you should fill that hole in. That’s how you should approach your retirement plan, with one exception. The only exception to this rule is that if you have a 401k or other retirement vehicle where your employer will contribute funds if you do, you should contribute and get the free money. Beyond that, pay off your credit card debt before you consider contributing more than the minimum or opening an IRA. Credit card debt will pull you down faster than retirement planning will push you up because the interest on credit cards is ridiculous and largely fixed… while you hope retirement investments will increase, that’s not guaranteed (but the debt is!).


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