No. of Recommendations: 0
I have heard two schools of thought about paying off credit cards...

One says pay the toughest one off first, because you dont want to carry the interest with you constantly

The other says pay all the small ones first. You get a nice psychological feeling dumping one card (And doing the happy dance)

I have flip-flopped over the two schools of thought. First, I started paying the smaller bill, but then I decided to pay the larger bill first. I've made a dent in it, but not as much as If I were to make a dent in the smaller card.

Which method do you follow and why? Should I pay off my smaller bills first, or to pick away at the larger ones?

Flip Flopping Fool
tsmitche
Print the post Back To Top
No. of Recommendations: 0
<<I have flip-flopped over the two schools of thought. First, I started paying the smaller bill, but then I
decided to pay the larger bill first. I've made a dent in it, but not as much as If I were to make a
dent in the smaller card. >>

I also went back and forth over which method to choose. Warm fuzzies weren't a big deal to me, but less hassle and time, as mentioned before, was. What I finally did:

1) I figured out exactly how much money I could put toward debt each month and divided it in half.

2) I send half to the highest interest debt - this was also my biggest balance, a car loan and 19% (spotty credit left few options).

3) I use the other half for the snowball method on my smaller debts.

It's working out pretty good for us. We should be out of debt, except for student loans, by my birthday in November (just in time to have that cash to avoid the Christmas credit card temptations).

Good luck!

tammy
Print the post Back To Top
No. of Recommendations: 0
I have heard two schools of thought about paying off credit cards...

One says pay the toughest one off first, because you dont want to carry the interest with you
constantly

The other says pay all the small ones first. You get a nice psychological feeling dumping one
card (And doing the happy dance)
...
Which method do you follow and why? Should I pay off my smaller bills first, or to pick
away at the larger ones?


You've answered why. And only you can choose which is better for you.

Print the post Back To Top
No. of Recommendations: 1
I've done a kind of combination of the two. I have a Citibank that I had a few charges on. It charges about 15% for purchases, and 3.9% on transfers. I'm going to have it paid off this month. Next month I'll be transferring $2000 from my 20% Discover to the Citibank to take advantage of the 3.9%. I'll also be sending Discover my regular payment of $200, so it'll really be getting a double whammy. It's still going to take a while to pay off the rest of the Discover, but I'm trying to play the transfer game as much as possible.

I figured out that transferring the $2000 from 20% to 3.9% takes about 6-8 months off of my total payoff time. Isn't that just crazy?

Chugging along,
AstridS
Print the post Back To Top
No. of Recommendations: 0
First and foremost, let me state, debt is debt. Large bills, small bills and medium sized bills wipe them all out. Which one you do first, is entirely up to you and will be based on your personality.

Being one to lean towards Psychology, I favor knocking off the little ones first (that and I love to dance). I do need that sense of accomplishment, but I will admit, it's not for everyone.

Logic and number crunching dictate, knocking off the one with the highest interest rate or the largest one (with luck they aren't one in the same). This keeps you from lining the creditors pockets more than is necessary.

To each their own, for in the end, the result is the same. With your very own Happy Dance, and a sense of accomplishment to boot.

Best of luck
~Adam
Peace
Print the post Back To Top
No. of Recommendations: 0
I am the reluctant husband. I prefer that we pay the largest interest credit cards first. The same psychological good feeling can be derived by graphing or charting the decrease in the total debt owed month to month. The logic of paying off the largest interest debt is obvious. Good luck in whatever decision you make.

Alliethefool's reluctant husband
Print the post Back To Top
No. of Recommendations: 0
I say pay on the higher interest loans first (makes the most financial sense), unless you can pay off the smaller balance loan in 6 months or less (still feels good to knock those little buggers off!!)

Allen

P.S. A friend of mine said to me recently (jokingly) that when he finally gets out of debt, he's going to throw such a huge party he'll have to spend another year paying it off!!
Print the post Back To Top
No. of Recommendations: 0
P.S. A friend of mine said to me recently (jokingly) that when he finally gets out of debt, he's going to throw such a huge party he'll have to spend another year paying it off!!

Heh. But, after you get out of debt you deserve a celebration - what are some ways of celebrating without getting into debt? The Happy Dance is a good start, but what else?
Print the post Back To Top
No. of Recommendations: 0
Regarding #10971, Pot Luck. This was a custom at my school for Ph.D. parties. The Doctor paid for most of it, but everybody brought something.
Print the post Back To Top
Advertisement