Paying off CCs

Discussion in 'Credit Talk' started by Shantel, Apr 3, 2001.

  1. Shantel

    Shantel Well-Known Member

    I've heard many different opinions, so I'm asking people here. What's the best method for paying off credit the ones with the highest interest first, or pay the ones with the smallest balance?

    It makes since to me to pay the one's with the highest interest first, but at the same time, if that one has a HUGE balance, while you're trying to pay it off, one could become frustrated.

    I've tried it both ways and paying the one with the smallest balance has worked best for me. As I paid them off, I had these small accomplishments along the way and that kept me motivated.

    I set up an Excel spreadsheet to track the interest I was paying toward the balances and tried different scenerios as far as paying them off and the savings in interest wasn't that large (maybe cause my balances are relatively low?)

    Anyhow, your opinions are appreciated.
  2. sam

    sam Well-Known Member

    pay off the highest interest first, it only makes sense. As you are paying off the higher interest card at a rapid rate, they'll notice after a month or two, and BAM time to call them up and let them know whats up. I'm paying this off to close my account, convince me otherwise.

    If you are paying higher than 16.9% you are probably not aggressively handling your accounts with retention.

    Give them something to worry about, like a few large payments, then go for the interest rate.

    It works very well. If you pay the minimum, they know you are stuck with them and won't give a sh!t cause you are their bread and butter customer :)
  3. Dani

    Dani Well-Known Member


    I prefer paying the lowest balance first. If for nothing else, it is a motivational starter. After paying that balance off I add that previous payment to my next highest balance until that is paid off and so on. My husband and I did it this way and paid off four of our charge cards in five months - one more to go. Best wishes.

  4. Austin

    Austin Guest

    Payoff software

    I don't think there is a "right" way to pay them off...just the best way that suits your personal goals. Some people want to see *results* in that they are paying something off so they should pay off the smallest balances first. Some want to save money on interest so that means paying off the highest interest/balance combination first.

    I have been playing around with a program called Debt Analyzer which is nice because you input your balances, minimum payments, APR and if you can devote any extra money to the payoff. It shows you in numbers and with graphs what happens depending on the strategy you choose:

    -Highest Interest Rate First
    -Smallest Balance First
    -Largest Balance First
    -Smallest Minimum Payment First
    -Largest Minimum Payment First
    -Smallest Current Payment First
    -Largest Current Payment First
    -Shortest Term Debt First
    -Longest Term Debt First
    -Funds Dispersed Equally
    -User Defined--any way you want it

    Another program out there is called Zilch and it does similar calculations.
  5. Cadillac408

    Cadillac408 Well-Known Member

    Re: Payoff software

    Scramble around to obtain credit.....scrabmle around to pay off debt! What a vicious cycle! :-\

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