Interest Cuts Both Ways

Interest is one machine running in two directions. When you invest, compounding works for you. When you carry debt, the same machine runs in reverse — the balance grows on its own, against you. Which means paying off a debt is itself an investment, with a return equal to the interest rate, guaranteed.

The teaching example: a $1,200 credit card balance at 24% costs about $288 a year in interest. Paying it off "earns" that $288 — a guaranteed 24% return, with zero risk. Now compare the alternative: putting that $1,200 into a market you hope returns 7%. A guaranteed 24 beats a hoped-for 7, and it is not close. No legitimate investment offers a certain 24% — but escaping one does.

That is the general rule hiding inside the example: a high-interest debt is an investment opportunity in reverse, and killing it usually outranks everything else the money could do. Low-interest debt is a different, genuinely harder question — this principle draws its bright line at the expensive kind.

In the simulation, the payoff-versus-invest preview puts the two options side by side, and Jordan's $1,200 card at 24% is the live case where the choice stops being abstract.