Which Debts To Pay Down First

Focusing on the credit card with the highest rate can be the wrong approach for some. If you’ve racked up a lot of debt on your credit cards, you’re not alone. In fact, of the 90 million households in the United States that own at least one credit card, the average debt totals a whopping $10,691, according to CardTrak.com. Many of these households are only paying the minimum payments on their credit cards too. If that sounds like you, here’s some food for thought: If you carry the average credit card debt of $10,691 and only pay the minimum payments each month, it will take you nearly 33 years to pay off your balances completely.*

Clearly, the minimum payment method is not a great way to manage your debt. It’s time to start paying down your balances and rid yourself once-and-for-all of that perpetual black cloud. But where do you start? If you have several credit cards – and many of us do – it’s smart to devise a payoff plan. There are two ways to do this that are widely talked about, each of which focus your energies on a single debt, while paying just the minimum payments on your other debts.

Keep in mind that these strategies will work for all of your debt, including auto loans, student loans and home loans, but for the sake of keeping it simple, let’s concentrate on credit card debt. Here’s how to do it…

Which Debts To Pay Down First