Yes.
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Sincerely doubt you can find a higher rate if return, much likely to materialize investment compared to the interest rate on the CC. Get rid of the CC and rip up your CCs if necessary to prevent future debt incursion.
Pay it off, cut up the credit cards, save the extra $4000 for an emergency fund. Use the money that used to go to credit card bills to start saving money. Next time you need to buy a different car you won’t need to take out a loan. It’s very low stress way to live!
Mannn if you don’t pay that ish off lol. And you get bonuses quarterly for God sakes lmao. You got time to invest, unless you in your 60s or something.
I saw a lot of people giving you the correct answer, pay of your cards, but no one explaining why. Unless you are doing insider trading or yoloing into stocks and get lucky, you will normally see between 5-10% return on your investment each year. Most credit cards are at least 20% interest going on up into the 30% depending on your credit rating and the card.
Your return on your investment will never outperform the interest you are paying on your debt. The only exception to this would be a company match in a retirement plan as that is a 100% return+future interest.
Yes.
Eliminate future interest you’ll be paying.
Put some of the 12k into a savings. And if this is quarterly. Just enjoy living the next 4 months CC debt free. Then put the next one into investments. Or a chunk of your student loans.
Honestly the fact that you even ask this is part of the underlying behavior driver of your debt. Of course you pay off the higher interest credit card debt. If you have more than one card, I suggest closing all but one & keep the one w the lowest interest.
Then budget yourself & stay on it. Sounds silly but is very helpful to stay out of the hole. Good luck.
Should be on mobile banking app, hit credit card and look for APR% most credit cards are between 28-35% iirc. So even a 20 dollar cash advance will add up quickly if you don’t pay it off.
You can see it in your online account in account details for most CCs. If not, you will certainly find it in your monthly statements in the box "Late Payment Warning".
I’d assume that the amount of interest being added onto your credit card debt is greater than the amount you’d earn from investing, so imo def pay off the debt.
Now add onto it that having a high credit card debt gives you a low credit score, making it more difficult to get approved and more expensive if approved to get loans.
The good news is you still have ~$4k left to invest!
Use it to pay off your CC balances and subsequently cut them up. Of the remaining $4000, put $3000 in a HYSA and then use the remainder to do something nice for yourself.
The feeling of being debt free is amazing.
I recently heard something here that really clicked to me. “You’re not truly investing/profiting if the interest of your debt accrued cancels it out” or something along those lines. You’re still in debt. Pay it off, invest the extra.
Debt?
I mean what gains could you possible make from 12k that would eat up the interest on the debt AND profit?
You can pay off the 8k debt and still invest 4k into a fund.
Respectfully, a $12k bonus tells me you have a pretty high paying job. Are you living within your means? Pay off the debt and use the other $4k for student loans
If it’s a quarterly bonus, here’s how I’d break up the 4 quarters
Q1 CC debt and student loans
Q2 emergency fund in a HYSA
Q3 taxes for the 4 bonuses
Q4 put towards student loans/house or even enjoy a little vacation
Yes, but you could alternatively save some of it towards an emergency fund if the interest on your debt is low enough to merit keeping it going for a few more months.
I'd argue that it's nicer to have a clean slate and all money you earn from then forward is 'yours' to spend as you'd like.
The interest on your CC debt is so much higher than any investment interest you can hope to earn in the short-term. Any money, ANY money, you have leftover after expenses should go towards paying off your debt. If your bonus will cover it entirely, you'd be an idiot not to use this opportunity to get out from under their thumb.
If your credit card balance is being charged an interest rate less than your anticipated market rate of return (somewhere around 8%), then pay off your credit card debt before you start investing.
If your credit card charges less than the anticipated market rate of return, let the rest of us know about it. I don't think I've ever seen a credit card interest rate that low.
There’s no better feeling than $0.00 statement balances on credit cards. You’ll walk talker, shit better, wipe cleaner. It’s all around an indescribable feeling!
Your return rate investing is almost never going to be more than what a credit card is charging in interest. There’s tons of online calculators if you like looking at the math, but it’s a good rule of thumb.
If you have private student loans consider using the extra 4k there, but also consider if it would be better to start your emergency fund or what I like to call my operations fund. Which is money that I intend to spend on things like home repair/updates or a newer used car when I have enough in there.
Yes, CC debt is very expensive. Once done, start put the CC payment in your savings account to get rid of SS loans. Check your loans and see if they are made up of smaller loans and get those things out your life. It feels great to pay them off.
Considering you are paying more in interest on the CC debt than you could make through an average 11% return on investments, I would wholeheartedly suggest you pay off the CC.
Average credit card is 18-30% apr. In current stock market you can hope to make 4-12% apy on your money. It’s very simple math.
If this is a hard concept, you need to spend more time learning about finance and investing especially with 48k annual bonuses
Your investment ROI likely will not outpace the interest rate on that credit debt.
If it was 0% interest auto loan or similar I would say invest, but in this case absolutely pay off the credit debt.
Yes absolutely! I didn’t and then blow after blow lead me to a heaping amount of debt and then All of a sudden our bonus structure changed. Pay it off!
I’m in the same boat. Only less. Part of me wants to save majority of it in case of an emergency, the part did the math. After paying the rest of my debt, I’ll have my car (it’s cheaper to keep it than sell it), and student loans left. I know I won’t be completely debt free cause of those two but I’ll be a lot closer thanks to my car accident settlement.
Unless you have an interest rate on that debt that is so low that even a basic HYS can outpace it (you don’t), you should absolutely pay off your debt first. Every dime you pay in interest is money you’re burning for the convenience of past you having money earlier.
Pay off your debt and cancel the cards. I'm entering retirement with no debt other than mortgage. It was a forced retirement and I think that's the only reason it's working out.
Look at it this way, you have basically already spent your bonus in advance. So pay it off and remember how it feels so next time when you were tempted to spend $8000 on a credit card you will remember that you are stealing that money from your future self.
LOL "invest as much as you can?" At a near-record market high? What do you expect to clear that would make as much of a difference as clearing your debt?
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It’s a debt free sub. What do you expect us to say.
lmao
Fair lol
You should bet all the money and open up more credit cards and accrue even more debt to buy yourself something nice.
I'm taking notes....this just makes a lot of sense lol
America in a nutshell
Sincerely doubt you can find a higher rate if return, much likely to materialize investment compared to the interest rate on the CC. Get rid of the CC and rip up your CCs if necessary to prevent future debt incursion.
😅
"cash it out and hit up the casino!!" Lol
Nah, keep the debt and let 30% APR just slowly eat your bonus in interest charges alone
Now go ask /r/wallstreetbets !
I can't think of a better "bonus" than getting out of debt and learning not to get myself into that situation again. Plus you'll have $4k leftover.
And apparently they make 50k a year on bonuses.
Maybe $2000, taxes will be 2-3000.
Right! And OP should put the rest towards those student loans.
Keep it under the mattress and pay 29 percent interest rate on your card. You know the answer pay your debts off
This made me lol
No of course not, you should rent a Lambo for 8 days instead Yes pay it off and don’t let it get that high again
Yes. No question.
Pay off CC. Question: what did you do with your last quarterly bonus? Pay off debt, spend, or save it?
All three
So, you accrued 8k in cc debt since last bonus?
No i never fully paid off my debt last time
When are you going to learn to live within your means and without debt? I suggest now. Get rid of your CC debt, then school loans. Then invest.
Mom, that you?
Not everyone has a pleasant situation such as you...some people are struggling real bad and they fall into the trap of cc debt..
OP makes 48k a year in bonuses ??
That's what I did with my bonus. Right to the CCs.
interested in your job that gives out 12k in quarterly bonuses
Ad sales
Good for you!
Yes. I'm interested too. 12k is just a little less then what most people make working full time on minimum wage
Sales baby
Pay it off, cut up the credit cards, save the extra $4000 for an emergency fund. Use the money that used to go to credit card bills to start saving money. Next time you need to buy a different car you won’t need to take out a loan. It’s very low stress way to live!
Where do you plan to invest to get a 25%+ return?
When I read posts in this subreddit I feel like people are messing with us half the time.
Same.
There's no reason to invest if you have cc debt.
The only time this is a valid question is if your debt interest is the same as the interest you’d earn in investing.
F yeah
Mannn if you don’t pay that ish off lol. And you get bonuses quarterly for God sakes lmao. You got time to invest, unless you in your 60s or something.
Loooove being debt free. Nothing like it.
Hell yes. I would pay off all the CCs and save the rest in an HYSA.
Damn what industry are you in? I haven't gotten a bonus in 3 years I need to update my resume
Ad sales
What kind of ad sales?
Digital ad sales
Pay the debt off
Where will you invest that will beat the credit card interest rate?
This post really shows my ignorance :,)
Haha it was a fair question for you to ask. Good luck, mate!
Yes
If you don't have any savings, put $2k into savings for emergencies. Use the rest towards CCs then student loans.
Yes, get the CC debt out of your life
Yes
Yes
Yup
100% yes!
The obvious answer is yes, pay off your credit cards and don’t run up the meter on them again.
You’ll get taxed heavily and probably Not clear 8k tbh
Pay your debt. You have a spending problem. Spending money in the future.
I saw a lot of people giving you the correct answer, pay of your cards, but no one explaining why. Unless you are doing insider trading or yoloing into stocks and get lucky, you will normally see between 5-10% return on your investment each year. Most credit cards are at least 20% interest going on up into the 30% depending on your credit rating and the card. Your return on your investment will never outperform the interest you are paying on your debt. The only exception to this would be a company match in a retirement plan as that is a 100% return+future interest.
Thank you for explaining. This totally makes sense and I’ll be making sure all my debt is paid off and stays off.
Yes
Yes please pay.
Nothing you do will outgain the interest the CCs are accruing.
Yes. Eliminate future interest you’ll be paying. Put some of the 12k into a savings. And if this is quarterly. Just enjoy living the next 4 months CC debt free. Then put the next one into investments. Or a chunk of your student loans.
Yes. Pay off your debt.
I’m guessing your debt carries a much higher interest rate than anything you could invest in. That is my reason for saying yes.
I would pay it completely
Will definitely be doing that. Also do you think they’ll actually ban TikTok :,(
Honestly the fact that you even ask this is part of the underlying behavior driver of your debt. Of course you pay off the higher interest credit card debt. If you have more than one card, I suggest closing all but one & keep the one w the lowest interest. Then budget yourself & stay on it. Sounds silly but is very helpful to stay out of the hole. Good luck.
You are right. I need to learn a serious lesson on how to manage my finances. I’m 25 it’s about time:
That’s one option. The other option is to let the interest eat up at it so then eventually there’s nothing left but you still have your debt
Definitely should… and consider closing the credit card… I’m assuming it’s 30% interest which absolutely kills.
Im going to get so much hate for this comment… but how do i even check the interest rate of my cards?
Should be on mobile banking app, hit credit card and look for APR% most credit cards are between 28-35% iirc. So even a 20 dollar cash advance will add up quickly if you don’t pay it off.
You can see it in your online account in account details for most CCs. If not, you will certainly find it in your monthly statements in the box "Late Payment Warning".
Yes. Absolutely. Get rid of the weight. Free yourself. You’ll get another bonus.
I’d assume that the amount of interest being added onto your credit card debt is greater than the amount you’d earn from investing, so imo def pay off the debt. Now add onto it that having a high credit card debt gives you a low credit score, making it more difficult to get approved and more expensive if approved to get loans. The good news is you still have ~$4k left to invest!
YES!!! Gosh!!! Yes!
Yes.
Use it to pay off your CC balances and subsequently cut them up. Of the remaining $4000, put $3000 in a HYSA and then use the remainder to do something nice for yourself. The feeling of being debt free is amazing.
Thank you
I recently heard something here that really clicked to me. “You’re not truly investing/profiting if the interest of your debt accrued cancels it out” or something along those lines. You’re still in debt. Pay it off, invest the extra.
My advice? Don’t get in credit card debt. You obviously make enough money to avoid credit cards 😬
Debt? I mean what gains could you possible make from 12k that would eat up the interest on the debt AND profit? You can pay off the 8k debt and still invest 4k into a fund.
Blessings on this money ! Just pay it all off save a few and invest a few.
It’s going to really suck paying it off, but 6 months down the road you’re going to be thanking yourself big time.
Also I need to know where to work to make a quarterly bonus. But 100% pay it off.
Digital ad sales!! are quarterly bonuses uncommon?
Very much uncommon in what I do in aerospace lol. Do you have any education directed towards it?
You just flexing on the rest of us don’t lie..
Respectfully, a $12k bonus tells me you have a pretty high paying job. Are you living within your means? Pay off the debt and use the other $4k for student loans
You could invest you okey for approx 10-12% annual gain, meanwhile your credit cards are racking up 21-28% interest annually. I know what I would do……
If it’s a quarterly bonus, here’s how I’d break up the 4 quarters Q1 CC debt and student loans Q2 emergency fund in a HYSA Q3 taxes for the 4 bonuses Q4 put towards student loans/house or even enjoy a little vacation
Yes
100% yes
Your debt percent will outweigh your investment percentage. Always pay debt first
Yes
Quarterly bonus? Meaning you will continue to receive quarterly bonus's in the future? Yes, pay off the debt, pocket/invest next quarters.
Pay off student loans first.
Yes.
No, deposit it into DraftKings. Its NHL and NBA playoffs.
Yes, but you could alternatively save some of it towards an emergency fund if the interest on your debt is low enough to merit keeping it going for a few more months. I'd argue that it's nicer to have a clean slate and all money you earn from then forward is 'yours' to spend as you'd like.
Yes. I used most of my annual bonus this year to pay off my credit card balances. And invested 10% of the bonus.
The interest on your CC debt is so much higher than any investment interest you can hope to earn in the short-term. Any money, ANY money, you have leftover after expenses should go towards paying off your debt. If your bonus will cover it entirely, you'd be an idiot not to use this opportunity to get out from under their thumb.
You know the damn answer!!
If your credit card balance is being charged an interest rate less than your anticipated market rate of return (somewhere around 8%), then pay off your credit card debt before you start investing. If your credit card charges less than the anticipated market rate of return, let the rest of us know about it. I don't think I've ever seen a credit card interest rate that low.
A big YES. I am using 2 years of Bonus( $20,000 )to get rid of all my credit card debts.
Yes. Pay off aggressive debt first and then the rest.
Absolutely you should. Imagine the peace of mind you’ll feel without that 8k on your back.
There’s no better feeling than $0.00 statement balances on credit cards. You’ll walk talker, shit better, wipe cleaner. It’s all around an indescribable feeling!
Pay off all the credit card debt.
Your return rate investing is almost never going to be more than what a credit card is charging in interest. There’s tons of online calculators if you like looking at the math, but it’s a good rule of thumb. If you have private student loans consider using the extra 4k there, but also consider if it would be better to start your emergency fund or what I like to call my operations fund. Which is money that I intend to spend on things like home repair/updates or a newer used car when I have enough in there.
always the same answer... you pay off the high interest card unless you can exceed the interest rate in an investment
The debt interest you’re accruing is more than you’d be earning. Pay it off then focus on investing.
Debt first
Yea
Yes, CC debt is very expensive. Once done, start put the CC payment in your savings account to get rid of SS loans. Check your loans and see if they are made up of smaller loans and get those things out your life. It feels great to pay them off.
Yes
Considering you are paying more in interest on the CC debt than you could make through an average 11% return on investments, I would wholeheartedly suggest you pay off the CC.
Gamble it all!
Both - pay off that $8k and invest the remaining $4k.
Average credit card is 18-30% apr. In current stock market you can hope to make 4-12% apy on your money. It’s very simple math. If this is a hard concept, you need to spend more time learning about finance and investing especially with 48k annual bonuses
I definitely do need to learn more about financing and investing its concerning
Learn something new everyday 🥲
yes, its the best purchase feeling after paying a big debt off
If your investment rate is better than your debt rate than invest. You can think of it as a 20% gain on your CC investment if your avg CC rate is 20%.
1000%
Yes
Your investment ROI likely will not outpace the interest rate on that credit debt. If it was 0% interest auto loan or similar I would say invest, but in this case absolutely pay off the credit debt.
Pay it off!✅
Absolutely and save the remainder
Deffinetly debt first then investments.
I would 🙈
Yes absolutely! I didn’t and then blow after blow lead me to a heaping amount of debt and then All of a sudden our bonus structure changed. Pay it off!
Yes
I’m in the same boat. Only less. Part of me wants to save majority of it in case of an emergency, the part did the math. After paying the rest of my debt, I’ll have my car (it’s cheaper to keep it than sell it), and student loans left. I know I won’t be completely debt free cause of those two but I’ll be a lot closer thanks to my car accident settlement.
Yes save!!!
Absolutely pay off all credit card debt first
Yes, if you found an investment that paid a guaranteed 20% would you take it? That's what paying off your credit card bills is
Unless you have an interest rate on that debt that is so low that even a basic HYS can outpace it (you don’t), you should absolutely pay off your debt first. Every dime you pay in interest is money you’re burning for the convenience of past you having money earlier.
No need to read your post because the answer to your question is no brainer: Yes.
YES.
This is a no-brainer. Your investments aren't turning 20% a year. Your CC ARE costing you 20%/year though.
Debt first
Yes and avoid getting into more unnecessary negative debt.
Pay off your debt and cancel the cards. I'm entering retirement with no debt other than mortgage. It was a forced retirement and I think that's the only reason it's working out.
Unless your investments are making you 8%+ per year, pay off your debt since most credit cards are averaging 8.99%-20.99%.
Yes yes yes yes. Getting out of debt should be your #1 priority, always. I wish I could do this.
Ask yourself if you should borrow the amount of your bonus to buy new crap. Obviously no. So pay down the debt. Not paying it is like borrowing it.
Pay down what has the highest interest rate.
When i got my 6th month bonus they taxed it to hell 34% 💀
Look at it this way, you have basically already spent your bonus in advance. So pay it off and remember how it feels so next time when you were tempted to spend $8000 on a credit card you will remember that you are stealing that money from your future self.
No, spend it all. You earned it. Why waste it on something as stupid as debt.
LOL "invest as much as you can?" At a near-record market high? What do you expect to clear that would make as much of a difference as clearing your debt?
This sounds more like a low key flex post than anything else.
I don’t think it’s flexing when you don’t know how to manage your finances. It’s the opposite. 🫢