Same $4,100 as the earlier examples, no new charges, paying $200 a month. At 18.9% APR that takes 25 months and $890 of interest, $4,990 total.

There is a lever earlier pieces have not touched: the money going into retirement contributions each month. Pausing contributions is not the same as raiding savings — the earlier income-drop piece warned against raiding, and that warning stands: withdrawing from a retirement account triggers income tax plus a 10% early-withdrawal penalty. Pausing future contributions is a different move, and it has its own arithmetic.

What redirecting $100 a month does

Same $4,100, same 18.9%, only the payment changes:

  • Pay $200 a month: 25 months, $890 interest, $4,990 total.
  • Pay $250 a month ($50 redirected): 20 months, $680 interest — saves $210 and 5 months.
  • Pay $300 a month ($100 redirected): 16 months, $554 interest — saves $336 and 9 months.
  • Pay $350 a month ($150 redirected): 14 months, $468 interest — saves $422 and 11 months.

The months move this time — 25 to 16 — because the payment, not the rate, sets the schedule. This is both a money saving and a time saving, unlike the rate-cut piece, where the months barely moved.

Why the pause wins — for unmatched money only

The card charges 18.9%, guaranteed, on every dollar of balance, every month. The market returns about 7% a year on average — an average, not a guarantee, and it varies. Paying the card is an 18.9% guaranteed return; the retirement account is a 7% expected return. The gap is roughly 12 points, and it points the same way every month the balance exists.

But there is a line the pause must not cross: the employer match. If your employer matches contributions, that match is an instant 50% or 100% return before any market growth. One hundred dollars a month with a 100% match becomes $200 a month going in, worth about $5,366 after 25 months at 7% — against $336 of interest saved by pausing it. The match wins by an order of magnitude. Contribute enough to get the full match, and pause only the contributions above that threshold.

The honest cost, and the catch-up

Pausing is not free. The $100 a month would have grown to about $1,672 by month 16 at 7%. The pause only pays if you actually resume. Run the catch-up: debt-free at month 16, redirect the freed $300 a month into retirement for the remaining 9 months, and the balance at month 25 is about $2,764 — against about $2,683 if you had never paused at all. Roughly even at month 25, and debt-free 9 months early with $336 less interest paid.

The risk is behavioural, not mathematical: pause and never resume, and the $1,672 never comes back. If you pause, set the resume date the same day — the month the card hits zero, the contribution goes back on, plus the freed payment.

The pre-tax wrinkle

One adjustment if your contributions are pre-tax: pausing $100 of pre-tax contributions does not free $100 for the card. At a 22% marginal bracket it frees about $78 after tax, so the payment becomes $278 a month, not $300. That still takes 17 months and $603 of interest — saves $287 and 8 months, a little less than the $336 in the after-tax case. The conclusion holds; the saving is just smaller than the headline number. If your contributions are Roth, after-tax already, the full $100 reaches the card and the $300 case is the right one.

The smaller payment feels it more

At $130 a month instead of $200, the same $100 redirect is worth far more than twice as much:

  • Card at 18.9%, $130 a month: 44 months, $1,612 of interest.
  • Redirect $100, pay $230 a month: 22 months, $751 of interest — saves $861 and 22 months.

The timeline halves. Same pattern as the rate-cut piece: the smaller the payment, the more any extra dollar is worth, because more of it goes to principal instead of interest.

This is not financial advice — it is arithmetic on one balance, one rate, and one payment, with the assumptions stated: 7% is an assumed average market return, the match math assumes a 100% match, and the pre-tax case assumes a 22% bracket. Change any of them and the numbers move; the method does not.

Try the baseline on the free calculator: https://alapha888.github.io/irregular-income-debt-baseline/