Which credit card debt do I pay off first?
The debate on which is better, pay off based on the interest rate or the amount, is one that is argued over by top financial advisors. So, their is not a single correct answer to your question. The arguement for paying off based on amount is actually to pay off the smallest amount first. This is often referred to as the “snowball” method. The idea is that you attack your smallest amount first, then roll the entire amount you were paying on that to the next debt and so one until you pay off all your debts. You build bigger payments to send in like a snowball. The main argument for this is a pshycological one. Because the number of debts you have goes down quicker, it seems more managable and you feel more confident that you can actually get out of debt. This is the method that advisor Dave Ramsey suggests. The another option is to attack your highest interest rate debt. The arguement here is that when all things are equal, a dollar in the higher interest rate account is costing you more
