I will email you the spreadsheet. I was surprised myself- I thought it would require a much higher interest rate to overcome the power of the match. The real trick is that future contributions are matched at the same rate. So until you reach the limits the match % cancels out of the equation.

-Rick

You make a good point- near the match limits the math changes a bit and you will need a bit higher CC rate. I’ll dig up the spreadsheet I used and calculate the interest rates for the LAST $1000 you could contribute. I calculated the first $1000 because it seemed a more likely circumstance… and it doesn’t need a 3D graph to display!

-Rick

This is only applicable to people who are currently not saving enough to get the full match. The trick is that you are foregoing a small company match today, to get a larger company match tomorrow (once the debt is paid off).

If you are saving enough for the full company match today, then you will not be able to use the ‘trick’ of getting a company match on the money you eventually save by not having a CC payment.

Tread carefully, and run your own numbers — always.

Thanks for leaving the comment at my website. You bring up an interesting point and it’s definitely got me intrigued. My belief has always been to put enough money to get the match, then to handle any high interest credit card debt. Would it be possible for you to send me your spreadsheet? I feel like I must be missing some information. Thanks.

The equation is of the form:
(1+M)*Y = (1+M)*X

Where M is the matching percentage, Y is the return for today’s contribution and X is the expression for the return from the future contributions. Divide both sides by (1+M) and it drops out of the equation. That works for any M other than -1, but then I don’t think negative 100% matches are realistic cases!

-Rick

How can it cancel out?