Right now, savings account interest rates are very low. In addition, due to fluctuating stock market performance, many investments are not experiencing great returns. These two factors make it the perfect time to make an investment in yourself by using excess cash to pay off credit card balances. Doing so will benefit your budget and allow you to worry less about debt.

Credit card interest rates are usually 19 percent or more. Individuals who carry balances on their cards month after month end up making large interest payments. Some investments earn only about four percent returns and savings accounts are averaging interest rates of less than two percent. Rather than investing extra money or depositing it into a savings account, use it to pay off the card balances.

Not only will paying off the balances wipe the debt slate clean, it will provide you with a new outlook. Instead of getting back into the same situation in 2011, make a resolution to stay debt-free and invest the extra cash into vehicles that will earn some nice returns. Dividend stocks, mutual funds, or high interest-bearing certificates of deposit are several safe and conservative investment options.

Paying off credit card balances can be viewed as an anti-investment because the money is not earning a return. What it is doing is paying off the money owed more quickly, which lowers overall interest paid. This money saved can be invested or saved, depending on the individual’s needs.

Sometimes, the wisest investment is no investment at all and this may be the case for people with outstanding credit card balances. These folks can take a smart approach and handle their debt first before delving into the investment world. Doing so will allow them to start with a clean slate and focus on getting the highest returns possible.

In conclusion, if you have credit card debt, you should pay it off as quick as possible — even before investing your money elsewhere.

Keep learning more:

1. Why Paying Off Debt Is An Investment


2. Bonds Are a Low-Risk, Low Return Investment


3. Money Market Rates: Find The Best Money Market Rates


4. P2P Statistics: P2P Lending Earns ~9% Per Year


5. Why Everyone Needs Cash


6. Inflation is the Biggest Risk of Bond Investing


7. How To Find The Best Saving Account Rates

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