Pay Off Debt or Invest?

For most people, the rule of thumb is:

Pay off high interest debt first, then start investing and building savings at the same time.

High interest debt (like credit cards or payday loans) usually grows faster than most investments, so clearing it is often the best “return” you can get.

KOHO Everything While You Do Both

As you pay down debt and start saving, KOHO Everything can help your cash work harder in the background:

• Grow your savings with 3.5% interest, one of the highest rates in Canada

• Earn a 2% cash back rate on groceries, eating, drinking, and transportation and 0.5% cash back on everything else

• There are no foreign exchange fees, so you save on international purchases and travel

• Unlimited transactions and free e-transfers

• No minimum balance required, ever

When You Should Focus on Paying Off Debt

Make debt the main priority when:

• It’s high interest (credit cards, lines at 15–25%+, payday loans)

• Payments are stressing your budget

• You’re only making minimum payments and balances aren’t moving

In these cases, aggressively paying off debt is usually better than investing the extra money.

When You Can Pay Debt and Invest

You might split between both when:

• Your debt is low-interest (like a reasonable car loan or student loan)

• You’re comfortably making payments and still have extra money each month

• You want to build an emergency fund and long-term savings at the same time

A common approach:

• Put most extra money toward high interest debt

• Still put a smaller amount into savings or investing so you’re building future security too