February 12, 2025
Your existing debt levels and each credit card's annual percentage rate (APR) will determine the optimal strategy for paying off several credit cards. These are a few strategies for reducing credit card debt.
Prioritize paying off high-interest credit cards.
One way to lower credit card debt is to pay off the balance on the card with the highest interest rate first. The "debt avalanche method" is what this is called.
Although it may seem simpler to pay off your lowest debt first, some people argue that you can save more money on interest over time by gradually paying down high-interest debt. You can pay off the credit card with the highest APR more quickly by adding the amount of the payment you made to the minimum payment for the credit card with the second-highest APR. As you pay off each credit card account, keep using this strategy.
Prioritize paying off the credit card with the lowest balance
Prioritizing the credit card with the lowest balance is the emphasis of another strategy for paying off several credit cards. The "debt snowball method" is this.
You can use that monthly payment to pay off your next smallest credit card bill after paying off the smallest one first. The amount you can afford to pay on the subsequent credit card increases as you settle each balance.
Transferring funds to a credit card with 0% APR
There are credit cards with 0% introductory annual percentage rates. However, how do they operate and what does that mean?
You may be able to reduce interest costs while repaying your debt by moving your balances to a card with a low initial percentage rate. However, pay attention to the tiny print because some credit cards have a balance transfer fee, which is often a percentage of the transferred amount. Also, study how long the introductory offer on the balance transfer card is good for.
Your present financial circumstances will determine the best strategy for paying off several credit cards. The interest rates on your credit cards or the amount owed on each card may influence which credit card should be paid off first.
Armed with this information, you may start the process of paying off debt from several credit cards.
