Unexpectedly, you find yourself with an extra $10,000 of disposable income. You also have $10,000 in credit card debt. You’re torn between two options. Should you use that money to pay off your credit card debt, or should you invest the money (or put it into an interest-bearing savings account)?

You may find the idea of investing the money attractive. After all, you’re already meeting all of your required credit card payments so why not just continue to do that while you earn some interest by saving or investing the money? That’s what it really comes down to — interest.

Let Your Interest Rates be Your Guide

If you’re interested in taking the course of action that will ultimately save (or make) you the most money, what matters most is the interest rate on your credit card debt and how it compares to projected interest earned on savings or investments.

For example, if your credit card debt carries a 17.99% APR, and a savings account pays 4% in interest on your account balance, the smarter move would be to pay off the credit card debts. Why? Because even though you’ll earn some money in interest on that $10,000, you’ll lose even more money in interest payments on that credit card debt over the same period of time.

On the other hand, if you have a low interest credit card with a 10.99% APR (like the Citibank Clear Platinum credit card) and you can reasonably expect to see a 15% return over three years on an investment, you’ll come out ahead by investing the money (while continuing your regular monthly credit card payments).

Pay Debts First, Make More Money Later

There’s another way you can look at things. Even if your credit card interest rate is lower than the interest you would earn through investing, you may be better off in the long run by paying off the credit card debt first. Here’s why:

When you invest at the higher rate of return, you’ll make money but some of it will be offset by the interest you pay until the credit card debt is paid off. The sooner you pay off your credit card debt though, the sooner you’ll have more cash on-hand on a monthly basis (the money you used to pay towards your credit card balance). If you pay off the credit card debt sooner and then devote that extra monthly income to investments, you’ll be able to earn at the full interest rate, rather than a “two steps forward, one step back” approach of investing the initial $10,000.

Don’t Underestimate Your Risks

It can be risky to invest the money rather than using it to pay off your bills. If you invest in the stock exchange, for instance, you may not earn the return on investment you expected. Even worse, you may lose some or all of that $10,000 you invested in the first place. If there’s one thing you do know for certain, it’s that the credit card company will faithfully charge you interest every month, regardless of what happens to your investments. While it may be tempting to spend a sudden influx of cash, consider how much it will allow you to save (or make) in the future by paying off those credit card debts now.