Vivian Tu urges investors to halt stock purchases while carrying high-interest credit card debt
With average credit card interest rates hitting 20.94% in May 2026, Tu and regulators like the SEC advise clearing balances before entering the market.
Former Wall Street trader and financial content creator Vivian Tu has issued a stark warning to individuals carrying high-interest credit card debt: stop investing immediately. Tu, known for her multimedia company Your Rich BFF, argues that the mathematical reality of current debt costs makes prioritising repayment the only logical financial move.
The core of Tu’s argument rests on the widening gap between borrowing costs and investment returns. She notes that credit card interest rates can range from 20% to 30% annually, a figure corroborated by Federal Reserve data showing the average interest rate on credit-card accounts assessed interest was 20.94% in May 2026. In contrast, the stock market historically grows by approximately 10% per year. Chasing market returns while carrying a balance that compounds at double-digit rates leaves investors mathematically behind.
Tu highlighted this disparity during a recent episode of her Net Worth and Chill podcast, where she addressed a listener’s query about balancing investing with debt repayment. She stated that while the best day to start investing is yesterday, this advice does not apply to those with credit card debt. "You will not invest and make more than you would save by paying off your credit card debt," Tu said, emphasising that future market returns are not guaranteed, whereas the cost of debt is certain.
This stance is reinforced by major US financial regulators. The Securities and Exchange Commission (SEC) states that no investment strategy offers a better return or lower risk than eliminating high-interest debt. Similarly, the Financial Industry Regulatory Authority (FINRA) advises investors to get financial basics under control first, which includes paying down high-interest obligations and building an emergency fund covering three to six months of expenses.
Tu distinguishes high-interest credit card debt from lower-interest obligations, such as certain student loans. She suggests that if loan interest rates are below 7%, individuals may be able to manage payments alongside investing. However, for rates above 7%, she recommends prioritising repayment. The SEC also notes an exception for employer-matched 401(k) contributions, which provide immediate returns through matching funds, making them a worthwhile investment regardless of other debt.
As of market close on 14 August 2026, the S&P 500 index was up 13% for the year. Despite this positive market performance, Tu and regulatory bodies maintain that the hurdle for credit card debt remains too high to justify allocating capital to equities. Investors are advised to clear these balances first to avoid the risk of debt growth outpacing investment gains.
