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I have 3 maxed out credit cards. One of the credit cards is 0% interest until this June. Additionally, I have a reserve line from US bank that is charging me $20 interest a month. Which one do I pay off first? or All of the equally. Im lost.
@garci349 wrote:I have 3 maxed out credit cards. One of the credit cards is 0% interest until this June. Additionally, I have a reserve line from US bank that is charging me $20 interest a month. Which one do I pay off first? or All of the equally. Im lost.
Two common strategies:
1) Pay off first the account with the highest APR (so minimum on the 0% until the intro period ends). This saves the money spent on interest.
2) Pay off the smallest account first. This allows people to see the progress that they are making (four loans, then three etc), even though more will spent on interest.
Here's the simple rule about paying CC debt:
1. Pay all the minima first
2. If there's money left over from step 1, pay the balance with the highest interest rate
3. If there's money left over from step 2, pay the balance with the next highest interest rate
4. If there's money left over from step 3, pay the balance with the next highest interest rate
5. If there's money left over from step 4, etc.