Many Americans are in a tight spot: Average credit card debt has topped $7,300, and nearly two-thirds say it’s delaying major life decisions. One option is to prioritize paying off that debt over 401(k) contributions. But skipping 401(k) contributions means missing out on long-term growth and, for many, ‘free’ money from their employers.
So should you pay off credit card debt first or invest for the future? Below, we explain the tradeoffs and help you choose a strategy that fits your situation.
Key Takeaways
- When your employer matches your 401(k) contributions, that “free” money, plus years or even decades of compounding, typically outweighs the cost of carrying an average credit card balance.
- Even without an employer match,…
