my way to get out of debt
One thing I do is to pay off the credit card with the lowest balance, not the highest interest rate, that way I'm lower the amount of credit card I owe and once a card is paid off I take that money and apply towards the next lowest balance. I feel a great sense of accomplishment when I pay off a card.
It would be best to over pay on the high interest card also.
I would focus on the card with the highest interest rate. That'll give you more money to work with in the end to put toward the smaller bills.
It seems I cant understand why do I need to pay off first the credit card with the lowest interest rate? And leave the highest one. I get what does coconut mean. He's right if I paid off the lowest interest rate first I'll get to pay off that card in no time. After paying the smaller interest rate I will need to work on more money to pay the highest rate.
i think that angle is doing the reverse. its more logical to pay off the debt with the highest interest rate because its the one hurting you most
In my case, I should find a way to reduce the accumulation of interest because that will pile up and make me difficult to cope later. I will reduce my unnecessary spendings and allot that for the payment of debts.
i agree, you have to start with the higher interest cards first. you are just throwing your money out the window there.
Paying off the highest interest rate card first makes the most financial sense, but there are other reasons for not attacking that card first.
The OP is not paying off the card with the lowest rate first, but the one with the lowest balance. This is a big psychological boost. You can celebrate, have a 'cutting of the card' ceremony, and really get a sense of accomplishment.
Also, if you sometimes miss payment deadlines because you have a lot to keep track of, this reduces by one the number of late payment fees you can be charged.
This doesn't apply if your cards all have close to the same balance. Then you should hit the highest interest rate card first.
it's a useful way to get out of the debt, i will try it and congratulation.
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