marty56 wrote:
There are 3 ways to play this.
1. Make minimum payments on all cards except the one with the smallest balance and pay extra on it till its paid off. Then attack the next card and so on.
2. FICO aware. make minimum payments on all cards and put the extra money on the cards that are maxed out so you can get util to 50%, then 30% and finally 9% or less.
3. Use a DMP/CCCS to consolidate payments into one monthly statement. This would be if you are having trouble making they payments or dont like paying all the interest.
I was in a DMP but I think #1 is the best way to go. My DMP program used that method.
IMHO I am not a big fan on borrowing to pay of debt. Never do 2nd mortgage or 401k loan.
Just to add to Marty's excellent post:
4. Cost-conscious variation of #'s 1 & 2 - Pay minimum on all cards except the one with highest interest rate; put all extra cash into paying that one off, then tackle the next-highest interest rate card, and so forth. Getting the highest-APR cards paid off saves loads in interest and gives you that much more to put toward paying off your overall cc debt.
When I was faced with a similar situation, I PIFed any cards with a small enough balance that I could do it in one go, then tackled the big-balance cards in APR order.
Definitely try talking to your ccc's and see if they'll work with you on interest rates and in any other ways that will help you pay things down without going to DMP or BK.
Also take a harshly honest look at your monthly expenses and find every single way you can cut those expenses and put that $$ toward your debt pay-off.
Good luck!
