In my own experience there’s three perspectives that I take on in order to pay down credit card debt:
1. Pay the account that has the largest interest rate
This one is a simple concept. The account that has the largest interest will continue to pull the most interest from you percentage wise. Most of the time the smartest idea is to get rid of this account to ensure that the interest you pay in the long run will be smaller.
2. Pay the account with the smallest balance
This is a more interesting concept. Sometimes when you’re paying down a lot of debt, you need to have a few moral wins first to get you started. In business we would call these the “low hanging fruits”. The theory behind this strategy is that you can gain some confidence in yourself by saying, hey i paid off a credit card. It can be a good psychological victory for you to go this way.
3. Set up your pay schedule where you eliminate all your debt at the same time
Using this method you will have a set milestone that you can work towards and look forward to. This can really set yourself up for success as that one date is the magical date that you can finally be free. However, with this method, you have the potential of dragging out the amount of time it would take to clear all of your cards. This would mean that there aren’t small wins and you would have to stay strong and keep to your payment schedule in order to knock your debt out in this method.
With any of these methods, you’re going to achieve success if you stick with them. There’s no one way in my opinion that’s the best and that you should definitely go for. It really depends on your situation, what your financial goals are and how you want to go about achieving your level of success. Maybe the best way is to mix and match these methods. The point is though, you need to apply a clear strategy, stick with it and be aggressive in getting that debt down.
Hope this tip helped!