fastest way to cut cred card debt: pay off the small balances 1st or pay off the ones w the highest rate 1st?

Question

i have large 10% balances and smaller balances on store credit cards w/ higher interest rates, i would like to make eliminating this debt a priority, but which cards should i pay off first?

Answer 1

From a pure mathematical standpoint, the quickest (and cheapest) way to pay off credit cards is to pay off the cards with the highest interest first. This is because as your balance with the highest rate diminishes, the amount of interest accrued on the remaining balance diminishes as well.

However, many advocate the "debt snowball" which endorses paying the card with the lowest balance first, then moving progressively to the next highest balance as each card is paid off. This works for some people from a psychological standpoint because they see quicker results as each card is eliminated. For some, it has been the only method that worked. There is no doubt, however, that you will pay more money overall through this method, all other things being equal. This method is most closely identified with Dave Ramsey.

Negotiating with all the credit card companies for a lower interest rate is a good idea. If they are not interested in lowering the rate, you can bluff them by threatening to transfer your balance to a lower interest card.

Balance transfers are a tricky thing. In many cases, a credit card company will assess a charge for a balance transfer. Make sure that you read the fine print before doing this. Also, some cards have a separate interest rate for balance transfers vs. purchases. Do not be fooled. Good luck!

Answer 2

pay everything you can toward the smallest balance - while making minimums on the others....then add that payment to the next smallest and pay the balance off and so on...

You will feel good and stick with it because you get results sooner. Of course, if you keep using ANY of the credit cards, the cycle never ends.

Answer 3

I'd start with the smallest amount with the largest interest rate. You really need to knock out the highest rate cards first. Those interest charges sure rack up in a hurry.

Answer 4

Pay off the large balance first.

Answer 5

call your credit card companies first and try to negotiate lower rates and then see about transferring the debt to the one with the lowest rate.

Answer 6

Quite often you can contact the credit card company, and ask if they will accept a settlement payment. Many are willing to work with their customers in this regard.

Answer 7

Definitely the higher interest rates first. then the lower.

Answer 8

highest interest first. try consolidating all the debt on one low interest card