2 Methods Of Paying off Credit Card Debt – Highest Interest Rate Credit Card Vs. Lowest Balance Credit Card

There are two main methods that were used to pay off the credit card balance.You can either decide to pay off the credit card that has the highest interest rate first policy and decide to start with the credit card that has the lowest balance. Both have their advantages and disadvantages.

The first method is to pay the credit card with the highest interest rate to save the maximum amount of money on interest rate and financial charges.

This method of paying off the credit card debt works of the best if the credit card with the highest interest rate also has a large amount of balance and. Paying off this credit card will allow you to save a large chunk of money that would otherwise go towards the interest. If the credit card with the highest interest rate has a  minimal balance on it then you might be better off in choosing to pay off a credit card that has a large balance even though the interest rate on that credit card is  less. This is because owing to the  large chunk of balance, the interest that you need to pay will be larger nevertheless in spite of the lower interest rate.

In the method of highest interest credit card payment you pay off the credit card with the highest interest rate first and then moved to the next successive card with the next highest interest rate.

The second method is to pay the credit card with the lowest amount of balance so that you can pay off one credit card very quickly and then work your way up to the credit card with the next higher balance.

This method allows you to pay each successive credit card quickly allowing you to field more progress and motivated.

The main advantage of this method is that it allows you to quickly pay off your first credit card and makes it easier to deal with the credit cards with large balances. Once you have dealt with the credit cards with the small balances, you can shift those payments to tackling larger credit card balances.  Going straightaway for a credit card with a large balance might make things difficult for many people who are already under the burden of multiple credit card debt and finding it difficult to tackle them all together.

In both of these two methods as you pay off once is a credit card you divert the entire sum of money that you were paying on the previous credit card to the next credit card that you want to pay. Whenever you are paying off one credit card you continue to make the minimum payments on all the rest of the credit cards so that no debit card is reported as late and none of your accounts could delinquent which is bad for your credit rating.

In my opinion, the best approach to paying off credit card debt on multiple credit cards is a mix-and-match of choosing which credit card to pay first. The mix-and-match has to be between the credit card with the largest or the smallest balance and the interest rate. Doing some simple calculations will show paying off which credit card first  will allow you to save the maximum amount of money as well as which approach can help you to get out of credit card debt the fastest. Out of the above two mentioned approaches, starting with the credit card with the least amount of balance does come recommended because it makes the entire process of paying off your credit card debts much easier.