Which credit card should I start with first?

**justjenn** · 03-23-2002, 07:45 PM

I have decided that it is time to pay off our credit card debt. But, i know that it won't be easy. To tell you the truth , I don't know which of the credit cards has the highest interest rate, but I do know an estimate of the balances. Could you please help me to figure out which to begin with, and what is your advice on paying them off?

Visa-$600

Action Card-$350

JCPenney-$450

Visa#2-$175

Chase Mastercard-$400

Dept Store Card-$400

**CountryMom** · 03-23-2002, 08:38 PM

Actually your balances are not that bad.

First thing is don't use them anymore. NO EXCEPTIONS!!! This is very important.

Your bills should have your interest rate on them somewhere. The "best" way to pay them off is to start with the highest interest rate and work your way down.

The "easiest" way IMHO is to start with the lowest balance and work your way up.

Here is what I would do. Pay the minimum on all of your cc except the $175 VISA. For the $175 VISA pay as much as you can. Cut back on non-essentials to maximize this payment. I'm not sure how much extra money you have each month, but this cc probably won't take more than a month or two to pay off.

Next take all of the money you were paying ont the Visa and "snowball" it into the $350 Action card. By snowball I mean pay the minimum you were paying on the Action card and all of the money you were paying on the Visa. Mary Hunts "Debt Proof Living" explains this in great detail. It is worth checking out of the library.

Okay so after you pay off the Action card move on to either the Chase card or the dept store card (which ever has the highest interest rate). By now you will be using the money you were paying on the Visa plus the money you were paying on the Action card plus the minimum you were paying on either the Chase or dept cc.

I hope I am explaning this well. But what happens is as you pay off each credit card you free up more money for the next credit card. So eventually the cc start getting paid off rather quickly because you have more money to put toward them. Does that make sense?

Let me know if you have any questions.

**MANDERS** · 03-23-2002, 11:40 PM

See my post in the bottom(yes no one is reading it)of the challenges forum.You can use the snowball princible to pay off the rest of your bills too.

**MicheleMomof3** · 03-24-2002, 09:00 AM

Amanda is right.
I would pick one, it doesnt matter which one they all seem to be small in amounts. Pay min. payments on the rest and that one pay the min. plus extra. Once you have it paid off then move to the next one except when you choose one to work on you pay the min. also add in whatever you was paying on the last credit card you paid off. Example:
Visa-$600 **PAID** Your min was $30 plus an extra $15. Total $45 a month.
Now you will work on Action Card-$350....your min. on it is $20 you add the $45 from the credit card youve already paid off to the $20. Total $65. Once its paid off you go on to JCPenney-$450 , get the picture?
Its called Snowball Principla or Accelrated Margin etc. We used this to get out of our debt.
Check in the challenges forum for Amandas post.
~Michele~

**Jerseygirl** · 03-24-2002, 09:34 AM

Also, call the companies, find out what your current interest rate is and negotiate for a lower one. I had a problem when I had so many cards that I was using the individual store cards with higher interest rates when also in my pocket was a 9% Discover Card. I was lucky that when I figured it out, I was able to pay a lot of my little store cards that were at 15-21% with my 9% Discover, got rid of all the little store cards and only had one bill to pay. With the lower interest rate $ was going toward principle, not interest. Currently I only have AMEX, DH keeps a Mastercard, so wherever we go one is accepted.