i have fallen into the trap that is credit cards. i currently have 4. now, 2 of those are pretty high up, while the other 2 i could pay off in about 2 months. which should i pay first, the high credit cards, or the lower ones that i could pay off in a few months?
2007-10-11 04:55:24 · 6 answers · asked by icomeanons 2 in Business & Finance ➔ Credit
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2007-10-11 08:20:14 · answer #1 · answered by Blondie 3 · 0⤊ 1⤋
Well, you want to get rid of some of the cards. If you can afford to pay off the two lower ones AND pay the minimum on the high ones with an extra $20 or so you will be helping out your credit. If you pay just the minimums you are not paying off the ballance just part of the interest. So, if you can pay two off, and the minimums plus some on the high cards do that... then when the other two are payed off.. pay alot more to the high ones in 3 months time when that billing cycle happens. Just keep on top of it and if you fall behind make sure to pay SOMETHING to keep it from hitting your credit report.
2007-10-11 05:04:15 · answer #2 · answered by shadowsthathunt 6 · 0⤊ 1⤋
This is a good question. Many people debate about the right answer to this. It's always good to be able to eliminate debts. Make sure that you're able to make the minimum payments on all of the cards.
You can either pay off the cards with the low debt, so then you have 2 fewer debts to worry about, or you can pay the high debt cards so you don't accrue as much interest on those balances.
The best way to get rid of debt, experts agree, is to attack the balance with the highest annual percentage rate first. When that one is paid off, move onto the debt with the next-highest interest rate. If you're concerned about the small debts and you want to knock them off first, then you should pay off your small debts if it will give you the boost you need to stick with a pay-down plan for the larger debts. The key to an effective pay-down plan is sticking with it.
So those are your options. I personally recommend that you pay off your balances with the highest APR first.
2007-10-11 05:07:32 · answer #3 · answered by oceanpotion™ 3 · 1⤊ 0⤋
You need to pay off the one with highest INTEREST RATE first. So prioritized them with the interest rates. Pay minimum requirement on all those are lower interest rate, and the ONE that has the highest Interest rate you would pay more than the minimum requirement and need to pay more than the interest accrued too. Example for the paying the highest interest rate, the minum requirement is $50, but the interest accrued for this statement cycle is $70, so pay at least $80, or $100, or as much as you can for this credit card if you can afford it. Remember rest lower interest rates credit cards just pay the minimum.
2007-10-11 06:17:17 · answer #4 · answered by Anonymous · 1⤊ 0⤋
Bite the bullet and make a real effort to get out of debt. Make a strict budget. Get rid of all the extras -- cell phone, eating out, new clothes, etc. Put every penny you can squeeze out of that budget on the highest interest rate card, while making minimum paymens on the rest. When the highest interest rate card is paid off, move to the next till they are all paid off.
If you really work at it, you can pay it all off in one or two years.
2007-10-11 06:43:19 · answer #5 · answered by bdancer222 7 · 0⤊ 0⤋
I would pay off the smallest amount first. then move up the list to the next smallest. That way it keeps you motivated becuase you get one out of the way. Interest rate is not the real problem.
Check out daveramsey.com and listen to his radio show. He has lots of good advice on money and debt.
2007-10-11 06:37:57 · answer #6 · answered by heybulldog 5 · 0⤊ 0⤋