If i have a small sum of money and I want to use it to pay off some credit, what would be the best option?
I have three credit cards I need to pay off, 500, 1300, and 3450. I have about 1000 dollars to put towards paying off some debt. would it be better to completely pay off the 500 one and then use the leftover sum for one of the others? or put all of it into the biggest debt? or put even amounts into all three? Thanks in advance!
- StanLv 61 year ago
If you're employed full time. try to get a personal loan on all 3 accounts.Source(s): Retired bill collector 35 years
- oklatomLv 71 year ago
Smallest one first. That gives you satisfaction. Then take that amount and add it to the next smallest. Repeat as needed.
- MichaelLv 71 year ago
Putting it towards the highest interest rate debt will minimize the amount of interest you have to pay over the total journey of paying these off.
Putting it towards the smallest debt will eliminate a payment for you which you may feel provides some emotional sense of achievement or relief of some stress.
Which of those two is best really depends on you. If it were me, I'd go the route that saves me money (i.e highest interest rate first) but there's nothing wrong with going the other way if you're feeling overwhelmed and think the early achievement will keep you motivated. Ultimately, all that really matters is that you finish, not how fast you finish.
- curtisports2Lv 71 year ago
Put all of it against the account with the highest interest rate. Keep paying the minimum payments on the accounts with lower interest and get the one with the highest interest paid off as soon as you can.
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- hotstuffktrLv 61 year ago
"In general" - pay off the one with the highest rate. If you're REALLY trying to pay off your debt - get the $500 one out of the way. You'll be gratified that one of the three is gone.
- ibu guruLv 71 year ago
Which card has the highest interest rate? You pay that one first to save money on the interest.
- EvaLv 71 year ago
Look at the interest rate on the cards. If one is markedly higher that the rest, pay that one. If they're all about the same, I'd put it on the one with the largest balance. That will save you the most in interest and bring your minimum payment down. Some experts would recommend that you pay the small one off first, then use that payment to pay more on the second one, etc. I prefer knocking down the highest interest rate first.
- Pat WoodenLv 71 year ago
Pay off the card with the highest interest rate first. If there is money left, split it between the other two.
Then, start putting a regular amount on money each week into an envelope for bill payoffs. If you save $25 per week, you will have $100 in less than a month. On payday, put any cash still in your wallet into the envelope. You'll be amazed at how fast the balance grows. After a while you will find ways to add a couple of dollars to the envelope. Once you have enough to pay off a bill, do that and start saving for the final bill. It goes without saying that you can't increase any of those debts.
- Anonymous1 year ago
I would pay off lower balance cards first, then concentrate of higher balanced one using money that would have gone to lower cards plus a little extra each month
- RonLv 71 year ago
That's how it's done. Smallest debt first