You have debt. The order that works.
Debt is not a moral failure. It is an interest rate problem. The question is not whether you should have taken on the debt. It is what to do with it now. The answer depends on the rate, the type, and what else is competing for the same dollar.
This page covers personal finance fundamentals that apply regardless of your view on Bitcoin or fiat currencyfiat currencyMoney declared legal tender by a government, not backed by a physical commodity. Its value rests on trust in the issuing government.Full definition.
This page covers US-specific debt types and tax law. Outside the US? The principle (interest rate determines priority) is universal; the specific debt categories differ.
This page routes you through the debt section in order. The rate breakpoint and per-debt-type strategy are in Should I Pay Off Debt or Invest?, and student-loan specifics are in Student Loans vs Investing.
Credit card debt at 21%: pay it before you do almost anything else. Student loans at 4%: invest alongside payoff. Avalanche method saves the most money. Snowball method keeps you motivated. Use whichever you'll stick to. The biggest mistake is ignoring the math entirely; the second biggest is letting one type of debt stop you from contributing to your 401k up to the match.
Start here
Your most important tools
Common questions
Should I invest or pay off debt first?
Guaranteed return: your interest rate. Credit card at 21%: pay it first because nothing in markets reliably beats that. Student loans at 4%: invest alongside payoff and capture the 401k match. Order of operations →
Avalanche or snowball method?
Avalanche (highest interest first) saves more money. Snowball (smallest balance first) creates faster wins that keep you motivated. The best method is the one you'll stick to for the full payoff window. Run both side-by-side →
Should I consolidate my credit card debt?
Only when the math wins. A consolidation loan and a 0% balance transfer face the same test: consolidate only if the interest at the new rate over your payoff term, plus any origination or transfer fee, costs less than paying the cards off on the same schedule, and only if you stop using the cards. A longer term can cost more even at a lower APR verify×DON'T TRUST, VERIFYClaim: A consolidation loan's lower monthly payment may come from a longer repayment term, which can mean paying a lot more overall, including loan fees you would not otherwise pay.Verify at: CFPB: Consolidating credit card debt (Ask CFPB) ↗ Source 1 in the list belowThe CFPB's consumer answer on balance transfers, consolidation loans and home equity loans, last reviewed Sept. 2, 2026.. Count every fee: a loan's origination fee or points, where one point is 1% of the amount borrowed verify×DON'T TRUST, VERIFYClaim: Most consolidation loans have costs beyond interest, such as points, where one point equals 1% of the amount borrowed.Verify at: FTC: How To Get Out of Debt ↗ Source 2 in the list belowThe FTC's consumer guide says to run the numbers before taking a consolidation loan., and a balance transfer fee, often 3-5% of the balance verify×DON'T TRUST, VERIFYClaim: Some card issuers charge a one-time balance transfer fee of 3 to 5% of the balance transferred.Verify at: CFPB: How to find the best credit card for you (PDF) ↗ Source 3 in the list belowA CFPB consumer handout; the fee on a given card is in its terms.. If neither passes, kill the highest APRAnnual Percentage Rate (APR)The yearly cost of borrowing money, shown as a percentage.Full definition directly instead. Zero to One on consolidation →
Should I keep contributing to my 401k while paying off debt?
Up to the employer matchemployer matchAn employer contribution linked to qualifying employee contributions under a plan formula. Eligibility, vesting and plan terms determine what you receive and keep. The match ratio is not an annual investment return, and the invested balance can fall.Full definition: yes, always. The match is an instant 50-100% return. Above the match: depends on the debt rate. 401k match optimizer →
Reading path
Where to go from here
Sources
Verify badges in the text link to these sources. Figures, rates and rules change: check each source’s date before acting on it.
- Consumer Financial Protection Bureau, CFPB: Consolidating credit card debt (Ask CFPB) ↩
- Federal Trade Commission, FTC: How To Get Out of Debt ↩
- Consumer Financial Protection Bureau, CFPB: How to find the best credit card for you (PDF) ↩
Last updated . Not financial advice. Do your own research. Disclosures · How pages are reviewed