1. High-interest debts don’t provide future returns. Paying just the minimum required payment will stretch your “expenses” for consumer items. (Most high-interest debts are associated with consumer products.)
2. Interests paid on high-interest debts are not tax deductible. Low-interest loans may carry tax benefits, but not high-interest loans. It is like putting money into someone else’s pockets.
3. Investments may not suffice against high interest rates. Paying debts may seem like investing on tax-advantaged accounts. However, with interests as high as 19.99% APR, the investment may not be able to cover the interests. With an annual return of 9.82% in S&P 500, the loss may be equivalent to 10% per year.