You have to take into consideration how much is your 401k earning on average vs how much interest are you paying on your credit cards? obviosly if you are only seeing a return on 3 or 4% on your 401k and your credit cards are costing you 9% or higher, you should pay off the credit cards. It is wise to take full advantage of the match your employer offers, cause that is free money and a 100% return, but not always the best move if you are getting hammered with interest on your credit cards, which most do.

Hi Jonellyjojo,

First, I apologize for not responding earlier to your question. For some reason I wasn't able to see it until just now.

In general, capturing the "match" that an employer provides to 401k contributions is an extremely good idea. Not only do you have money compounding tax-deferred (or, in Roth 401ks, tax-free) during your working career, but you have extra employer money working for you as well.

Once that match is "maxed out", the decision of how to prioritize becomes less obvious. My own advice would turn on the specifics of your situation, especially balances, interest rates, and current available credit usage on your credit cards.

That you asked this question shows that you're trying to set financial priorities. Having taken that step, I would encourage you to go further and think about putting together a financial strategy--including concrete, attainable goals-- that incorporates commendable priorities like paying down credit card debt and saving for retirement.

If you wish to follow up with more specifics, I will happily share some more concrete reactions--and this time my reply should be much more timely.