@heyarrnold wrote:
@Anonymous wrote:
@heyarrnold wrote:
@1GaDawg85 wrote:I would go for the ones with the highest interest rate
+1
But TBH, I would do the math. Look at your balances and their interest. Although you may have a higher interest on one card, a card with a much higher balance and a lower interest may still cost you more monthly in interest.
+2 for GaDawg, but disagree with heyarnold. I'm assuming that you're putting all of the bonus money into paying down cards. Because of that assumption, it would be better financially to pay off the higher rates first and trickle down.
Example time: You get a $1k bonus. You have $10k on a card with 10% interest and $1k on a card with 30% interest. Without paying anythign off, you would accrue $1000+$300 = $1300 in interest from the two cards. If you paid off the 30% in full, you would accrue only the $1k from the first card. If you paid off as much as you could from the first card, you would still have $9k accrusing $900 on that card, plus the $300 of interest from the first card, for a total of $1200. Hopefully, you can see that it would be true even if your bonus was $2k (thus paying off card 2 plus as much as you can of card 1) or $500 (paying off as much as you can of card 2 is best).
Don't worry about utilization rates yet. Get your debt under control, and long term, the utilization rates will drop and your scores will increase. Good luck!
Edit: As one of the posters above me said, make sure you make the minimum payments on all the cards before targetting the one with the highest interest rate. You don't want any baddies from failure to pay the minimums.
Remember, I said it may lol. It depends on OP's interest rate. We know the balances, but we are not aware of what OP's interest rates are. Take for example:
Balance $500, Interest: 22.00%/12 = 1.8333%, interest to pay of balance: $9
Balance $5000, Interest: 20.00%/12 = 1.666%, Interest to pay of balance: $80
Just because a lower interest rate is available on one card, depending on the balance, it MAY be wiser to pay a card with a higher balance first.
I agree with the comparitive $ value of the monthly interest. You can marginally save by paying the lower value, higher interest card, but your bigger issue is the high value, similar interest card monthly $ of interest.
One thing people may not realize, however, is that the credit card interest rate calculations are higher than that. If 20% and 22% are the nominal rates, most credit card interest is effectively daily compunding.
20.00% on the statement actually calculates out to 22.13% if you were to just pay interest for a year.
22.00% on the statement is 24.60% over the course of a year.
The Excel formula I'm using is: ((1+([nominal int rate]/365))^365)-1
From there you can divide by 12 to estimate.
Next, it is advisable to try to find a lower interest rate card 
@heyarrnold wrote:
@Anonymous wrote:
@heyarrnold wrote:
@1GaDawg85 wrote:I would go for the ones with the highest interest rate
+1
But TBH, I would do the math. Look at your balances and their interest. Although you may have a higher interest on one card, a card with a much higher balance and a lower interest may still cost you more monthly in interest.
+2 for GaDawg, but disagree with heyarnold. I'm assuming that you're putting all of the bonus money into paying down cards. Because of that assumption, it would be better financially to pay off the higher rates first and trickle down.
Example time: You get a $1k bonus. You have $10k on a card with 10% interest and $1k on a card with 30% interest. Without paying anythign off, you would accrue $1000+$300 = $1300 in interest from the two cards. If you paid off the 30% in full, you would accrue only the $1k from the first card. If you paid off as much as you could from the first card, you would still have $9k accrusing $900 on that card, plus the $300 of interest from the first card, for a total of $1200. Hopefully, you can see that it would be true even if your bonus was $2k (thus paying off card 2 plus as much as you can of card 1) or $500 (paying off as much as you can of card 2 is best).
Don't worry about utilization rates yet. Get your debt under control, and long term, the utilization rates will drop and your scores will increase. Good luck!
Edit: As one of the posters above me said, make sure you make the minimum payments on all the cards before targetting the one with the highest interest rate. You don't want any baddies from failure to pay the minimums.
Remember, I said it may lol. It depends on OP's interest rate. We know the balances, but we are not aware of what OP's interest rates are. Take for example:
Balance $500, Interest: 22.00%/12 = 1.8333%, interest to pay of balance: $9
Balance $5000, Interest: 20.00%/12 = 1.666%, Interest to pay of balance: $80
Just because a lower interest rate is available on one card, depending on the balance, it MAY be wiser to pay a card with a higher balance first.
+1
