Question for the Money Doctors

Question submitted on Jun 15, 2011.

Question

Between my partner and I we have multiple credit cards. How do we decide which one to strive to pay off first? The higher interest? The lower balance? Pay on each equally?

Answer

First, make a list of your credit card balances, the minimum monthly payment required for each, and the interest rate on each.  Every month, pay at least the minimum required on every one.  Any excess funds you have should be paid to the card with the highest rate until it is repaid, then make the extra payments on the next highest. 

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