: What to do with this cash- pay off ONE card, or pay down a few? I've got a k payment coming through with about k in CC debt, over 4 cards. 1 card is at 00 (total line is k), 14.8% interest rate, another at 50(total

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Make all minimum payments every month. Then throw every cent you can to the highest rate card.

It's that simple.

Anyone who tells you to pay off lowest balance first is mistaken. Pay off a bunch of 8% 00 debts before ,000 %18 debt? Makes no sense.

Edit in response to Kent's comment below -
You sound like a Davidian, a Ramsey fan. I respect your view (and his), but struggle with the cost it can add over one's lifetime. The Ramsey method, known as the debt snowball, comes at a cost. It may be pennies, or many thousands of dollars. It's a direct result of the difference between the rates for the low balance cards versus the high.

In an article titled Thinking about Dave Ramsey I wrote, offering examples of his method versus the one that appears in conflict, paying the highest rate card first. Keep in mind, any example might appear contrived, to prove the author's point. My own experience was that the highest interest cards offered a high credit line. When rates were starting to fall in the mid-80's, there were cards that offered a relatively low 9-12%, versus the 19.8% that was common. Those cards also came with a low credit line.

To Knuckle-Dragger's comment on the question - the spread here is 4.5%, so the incremental cost of the inferior method isn't as high as my article.

Above, I line up the debt 2 ways, by balance and by rate. I move the top 00 for each sort to col 3 and apply the rate. The annual savings by paying each way is totaled. The 12 month difference is 8. Inferior method leaves 50 accruing interest at an annual 83, versus my method, 15.

In the final analysis I'm left saying this - "Do what works for you. But, understand the numbers, and the math of whatever method you use. Be ready to say that you are willing to pay that incremental cost because the sense of victory (here, knocking off 2 cards immediately, versus 1) is worth the small extra cost.

Kent - I hope you take the time to read through this, and at least acknowledge I am keeping an open mind on this.

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Pay off the one with the highest interest rate: the 19.3% interest rate card in this case. Since you'll have ,500 left, use that to pay off the next one with the highest interest rate: the 17% interest rate card in this case.

Paying higher interest rate debt will always save you the most money.

Let's say you have two loans of 0 each. Loan A has a 30% daily interest rate and loan B has a 10% daily interest rate.

You have 0 to pay off one of the loans:

If you pay Loan A, tomorrow Loan B will cost you in interest.
If you pay Loan B, tomorrow loan A will cost you in interest.

So you should pay off loan A to save on interest. Use the same concept with credit cards.

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Mathematically, the answer given by Yasmani Llanes is perfectly correct.

However, some people have psychological problems handling debt. If you fall into that category, I'd recommend paying off the card with the highest interest, and the one with ,600 (you are 50 dollars short, so add that out of your pocket). That way, you have reduced the number of cards from 4 to 2. You lose a bit of money because there is another card with 2% higher interest, but some people are better off psychologically if the number of debts and the number of bills coming in every month is lower.

One warning: Most of the answers should apply to credit cards anywhere in the world. However, in the UK your interest rate depends often on the payments you make. Minimum payment = high interest rate, a bit higher payment = medium interest rate, high payment = lowest interest rate. So making the lowest payment on all cards except the one with the highest interest rate is in most case a mistake; you'd want to pay enough on every card to avoid the penalties for not paying off enough.

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All of these loans are very high interest. Instead of worrying about which loan to pay first, I recommend coming up with a plan to eliminate all four of the loans as quickly as possible.

You have about .5k in debt total. After you use the k you have on hand to pay it down, you'll have .5k left. I have no idea what your monthly income or your expenses are, but if you can scrape together 0 a month to pay down these debts, you would be debt free 12 months from now.

If you can commit to paying down this debt that quickly, then it doesn't matter which one you pay first, because they will all be gone soon, and the difference in savings between the various methods is negligible.

Think about what you could accomplish after you don't have these debts hanging over your head anymore. It's worth a little sacrifice now to be debt free a year from now. See if you can make it happen. The longer you wait to eliminate this debt, the more it costs.