Think about it. You have let's say a credit card with an apr of 18% to 20% and you own an equal amount in an index fund averaging maybe 7% to 10% a year if you're lucky. You're not making a dime!
$10k on a credit card costs you $1800 to $2000 or more a year to carry the $10k debt.
And unfortunately what happens on average is people think they can pay off the balance and they end up racking up even more debt when a new high cost event arises and that continued debt costs them 18% to 20% or more a year.
So it makes absolutely no sense to carry the same amount of debt in stocks or index funds unless over time those investments net you more than the credit card's apr. 20% yearly returns for any length of time are extremely difficult if not impossible!
So IMO it's better to pay off the majority or all of your cc debt before even attempting to invest and to secondly work on increasing your emergency fund and income to keep yourself out of debt in the first place!
Your emergency fund and income should be priority #1!! Even above owning stocks.
Debt costs YOU money! Think about an emergency fund as a way to keep out of debt should a high cost event happen and they will!
If you absolutely must have debt always go for the cheapest debt possible. A loan from a credit union is better than putting $10k on a high apr credit card.
You have to think of the cost of storing your income. When you store your savings in cash right now it's costing you let's say 8% a year.
When you store your savings in an index fund its netting you 5% to 10% over a long period of time.
Storing it on a credit card is costing you 18% to 20% or more per year.
So the credit card is one of the worst possibilities to store your savings!
Building up the largest emergency fund you can, even before investing maybe, or at least alongside investing, is most important.
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