WHY PAYING OFF YOUR CREDIT CARD DEBT IS THE BEST INVESTMENT YOU CAN MAKE Published September 30, 1996 Other Columns by Beth Kobliner

People often ask me how they should invest the money they've saved up. And nine times out of ten, the person asking the question has credit card debt. So here's my answer: The best investment you can make is to pay off your credit cards. Period. If you have money sitting in a bank savings account, use it to pay off your debt; you could end up saving yourself hundreds of dollars a year. For example, let's say you owe $1,000 on your credit card, which charges you 18 percent interest. Meanwhile, you have $1,000 sitting in your bank account, earning 3 percent interest. At the end of the year, you would have paid $180 in interest to your credit card company, while your money in the bank would have earned you just $30. In other words, by "saving" your money in the bank, you have actually lost yourself $150. Remember this: Paying off a credit card with an 18 percent interest rate is the same as getting a guaranteed, tax-free return of 18 percent on an investment. That's a rate that even the biggest Wall Street hotshots would love! Beth Kobliner is the author of "Get a Financial Life: Personal Finance in Your Twenties and Thirties," published by Simon & Schuster in May. In 1994 and 1995, Kobliner was selected by TJFR Business News Reporter as one of the country's most promising financial journalists under the age of 30. Kobliner is currently a contributing writer for MONEY magazine and is a regular commentator on MPR's "Sound Money." She lives in New York City with her husband and their daughter. © 1996 Beth Kobliner, All Rights Reserved