Assuming that credit card rates are higher than your return on investments, paying off your credit cards is the smartest investment you can make.
Tax credits for retirement accounts might make a bit of a difference, but not enough to matter.
If a keeping a credit card balance while investing your spare cash were a good idea, then the thing to do would be to buy up to your limit with a credit card and put the spare cash in investments. [/bad idea
Unless you are paying in excess of 25% interest it is better to put funds into a 401(k) if you have it available with an employer match of some sort as it both increases your savings, and reduces your tax burden. And pay the debt down as fast as you can.
With this option not available you should still put some money into a savings/investment vehicle, even if just a small amount while attacking your debt.
The reason that you should do so is the law of compounding interest.
As someone pointed out above, $2,000 today is greater than $50,000 when you retire. And thats without adding a single penney to it over the years.
As with government, income isn't the problem, SPENDING is. People (like LetsRok) need to lose their desire for instant gratification and their now now now attitude that causes them to get into a situation where they are burdened with debt and unable to save.