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No. of Recommendations: 6
However at 12.5%, it's not entirely a clear-cut call. Punitive rates of 20+% would be much clearer. At 12.5% I'd first be asking myself - how quickly can I pay this off? Can I negotiate for at lower rate? Can I do a balance transfer to save on the interest? Is the stock currently over-valued? How much would selling that stock actually affect my taxes this year? (These are the things that are not equal.) Answering these questions before selling your investment are important because the answers might change your decision.

Given that the OP indicated that they were paying "a little over the minimum payment" it will probably take them several years to pay off the debt. A $300/month payment would pay off a $14k debt in about 5.5 years; $350/month would take about 4.5 years and $400/month would take just over 3.5 years - ASSUMING that the interest rate is fixed at 12.5% Therefore, the average annual return on the stock would actually need to be less than the 12.5% interest rate, even after adjusting for taxes.

However, I would have a big concern about the assumption that interest rates were going to stay the same for 3.5 - 5.5 years, given all of the posturing that's been done by the Fed about rates rising.

Additionally, there is a huge opportunity cost in paying that much each month toward credit card debt. For instance, $400/month is almost enough to fully fund a Roth IRA for someone who is under 50, so the OP will be missing out on being able to put that much away in a tax-free account for at least 3 - 4 years.

I would also refer the OP back to the article referenced in this post where Mark Cuban said, when he was asked what he wishes he'd known about debt in his 20s:

That credit cards are the worst investment that you can make. That the money I save on interest by not having debt is better than any return I could possibly get by investing that money in the stock market. I thought I would be a stock market genius. Until I wasn't.

I should have paid off my cards every 30 days.

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