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# Which credit card is better to pay off first?

This is part II of a question I asked a minute ago regarding my husband's credit cards. Which credit card is better to pay off first? We have credit card A with 30% APR. Credit card B has less owed on it and the APR is 23%. Which card do you recommend paying first?

Asked by Anonymous at 11:19 PM on Jul. 26, 2010 in Money & Work

• We have been getting out of debit via Dave Ramsey's Plan (Baby Steps). We've paid off over \$12,000 in credit card debt in about 20 months. This was done by paying off the card that had the LOWEST balance first, and "snowballing" that payment into the next credit card.

For example
Card A has 3,000 min. payment \$120 @ 14.00%
Card B has 5,000 min payment \$150 @10.00%

We paid of Card A first! (The card with the lowest balance). We gave them \$150 until it was gone. Then once card A was done we paid Card B the \$150 we were paying Card A plus \$150 min. payment. Making the monthly payments on Card B = \$300 (A+B). If you had another card (card C) then you would roll the payment over to Card C once card B was paid off.

Once card B was paid off then card C payments would be \$300 (payment paid to Card B) PLUS min. payment for C = NEW payment for C. (New Payment =A+B+C). Once C was gone you would do the same for D, etc.

Answer by SAHMinIL2 at 10:28 AM on Jul. 27, 2010

• Pay off the lower balance one first card while making minimum payments to the second card. When the first one is paid off, then roll the amount you would have paid each month to the first card and add it to the second card. Its called the snow ball effect. The amount you pay the next card is bigger and bigger as you pay off the smaller amount cards.

Answer by karamille at 11:21 PM on Jul. 26, 2010

• Like I said, I'm not the one with the credit cards. I like your answer the best Erica but I'm still gonna wait and see if anyone else responds. Tomorrow I'm going to go to my financial institution and talk to someone there. Plus I'm re-entering the workforce after being a SAHM for 20 years.

Answer by zboys at 12:15 AM on Jul. 27, 2010

• I would pay off the lower balance/interest rate first than focus on the bigger one.

Answer by Cassandre at 11:56 AM on Jul. 27, 2010

• Financially, the one with the higher interest. Emotionally, the one that would get paid off first.

Answer by oddfox at 11:21 PM on Jul. 26, 2010

• By the way... I have been Credit card free for 2 years now. (yay!)

Answer by karamille at 11:21 PM on Jul. 26, 2010

• why not make payment on both? but if you had to choose the 30% because you pay more interest on that

Answer by mommy_of_two388 at 11:22 PM on Jul. 26, 2010

• If it were me.

I would pay off the card with the highest interest rate first.. It will acrue higher faster than the other card.

Ideally. I would pay the monthly minimum on the lower card. Pay at least twice the monthly on the higher card. Then when the higher card is paid off. I would add that payment to the payment I was making on the other card, and get it paid off.

Answer by pixie_trix at 11:22 PM on Jul. 26, 2010

• Pay off card A with the higher APR first.

Answer by MsHouseWife at 11:22 PM on Jul. 26, 2010

• I agree with oddfox.

Answer by theutilitarian at 11:26 PM on Jul. 26, 2010