Usually when advising people to a off their credit card debt, the two approaches commonly taken are to either pay off the credit card with the highest interest rate first order start with the credit card balance that is the least. These are the advantages of starting with the credit card that has the highest interest rate and working your way down to paying off the balance on the other credit cards accordingly.
Paying off the Credit Card with the Highest Interest Rate Allows You to Save Money on Interest
The reason why you should pay off the credit card with the highest interest rate first is that you will save the maximum amount of money that would otherwise be paid to the credit card provider as interest charges and financial fee. Using the method of paying off the credit card with the highest interest rate first and working your way down to a credit card with the next highest interest rate saves you the maximum amount of money and is the cheapest.
Paying off the Credit Card with the Highest Interest Rate First Will Help You Get Rid of Credit Card Debt Quicker
The second reason is that it is also the shortest method to take. As opposed to paying off the credit card with the lowest balance and then working your way up to the next higher balance, if you work your way down from the highest interest credit card you will complete paying off all your credit cards sooner.
The best way to pay off credit card debt on multiple credit cards needs to be a balance between the balance on a credit card as well as the interest rate. The higher interest rate credit card may have the least amount of balance whereas a credit card with a lower interest rate may have a substantially large balance on it. This means that even though the interest rate is low the amount of money that you paint on the lower interest credit card is more than the higher rate credit card simply because of the higher balance on it.
The best way to pay off the debt on your credit card will be based on a mix and match of the two approaches of paying the highest interest credit card and the credit card with the highest of the least balance. You need to sit down and do some calculations to figure out which approach lets you save the maximum money as well as pay off the credit card debt quickly.