Credit Card Debt Management

Are you facing a lot of credit card debt? Is this debt spread across many different cards? If so, you are in a tough position. The first question that you have to answer is: which credit card are you going to pay off first? This may seem like a no-brainer, but don’t be so sure. There is a right and wrong way of deciding which card you should tackle before all else.

Most experts agree that you should pay off the credit card with the highest interest rate first. This will allow you to get rid of the card that is causing you the most problems. After all, a higher rate means that your balance will grow at a faster pace. In most cases it would be in your best “interest” to first take care of the card with the highest interest rate.

On the other hand, there are some people who simply want to get rid of credit cards as quickly as possible. If this sounds like you, paying off the card with the lowest amount of debt is probably what you are thinking about. Take for instance a card that has $500 on it. Although it may not be the highest interest card, there is a good chance that you can completely rid of this debt in one month. Although some won’t agree with you, it may be a good idea to pay off these small balances so that you can better concentrate on those that will take longer.

If you have a lot of debt spread over many credit cards you need a plan for paying them off. Are you going to pay those with the highest interest rate first? Or will you start at the bottom and work your way up?