Quote:
Originally Posted by disneysteve
If you are going to assume a 6% return for the 401k, then you should absolutely pay the credit card first since that has a guaranteed "return" of 12%. There is no way mathematically for the 401k to outperform paying off the credit card unless it earns more than 12% which is pretty unlikely. The time line doesn't matter.
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I think cooliemae is referring to the long-term effect of compounding in the 401k vs. a much shorter albeit more costly time period for the CC.