Ramit Sethi explains why you can't outinvest credit card debt. At 27% annual interest, the math is brutal: that rate beats stock market returns over 40+ years. Most people accept debt as normal because their parents did the same.
I'm just going to show you the math that is going to crush you and you don't even know it yet. Carrying high-interest credit card debt is one of the most dangerous things you can do for your money. But so many people have grown up seeing their parents in credit card debt that they just think it's normal. Here's why this type of debt is so destructive. Credit cards compound against you on average about 27% a year. Compare that to what you could make in the stock market, real returns over the last 40+ years. 27%. Even if you are doing everything else right, you cannot beat the interest rate that your credit cards are charging you. 27% per year. It's mathematically impossible for you to consistently get the same anywhere else. So you got to get out of this cycle.
