Americans owe a collective $3.9 trillion in outstanding consumer debt. While credit cards provide convenience, it’s easy for this type of debt to spiral out of control. And unlike cash – which disappears after you spend it – credit card debt can linger for years, long after you’ve forgotten what was purchased.

Some experts suggest paying off one credit card at a time. To be clear, you still need to pay at least the minimum amount due on all of your cards every month. However, when you decide to pay off one card first, you decide to make higher monthly payments on that card. For example, if you choose to pay off card #1 first, then instead of your usual $50 monthly payment, you would pay $75, $100, or whatever additional monthly amount you can afford in order to get to a zero balance on that card at a quicker rate.

However, how do you decide which card to pay off first? It depends on your personal situation, but these are some of the factors to consider.

The Card with the Highest Interest Rate

Most experts recommend focusing on the card with the highest interest rate. For example, let’s say card #1 has a 24% interest rate, card #2 has a 14% interest rate, and card #3 has a 10% interest rate. Since card #1 has the highest interest rate, you’re wasting the most money by keeping a balance on it.

Suppose card #1 has a $3,000 balance, and you’re paying $97.81 every month with the goal of paying off the card in 4 years. If you never charged anything else on the card, you would end up paying $1,694 in interest costs at the end of those four years.

Now, suppose you increase the $97.81 monthly payment for card #1 to $117.70. You would be able to pay the card off in 3 years – and it would cost you $1,237.13 in interest, but this is $457 less than you would have originally paid by not increasing your payment amount.

If you paid $158.61 per month, you could pay off the card in 2 years, and your interest costs would only be $806.74.

Now, if you really wanted to get aggressive, and paid $283.68 per month, you could pay off the card in just 1 year, and your interest would only be $404.14.

Notice the relationship between the higher payments and the lower interest costs. The more you pay monthly, the quicker you can pay off your balance, and the less money you will waste on interest. That’s why most experts recommend paying the card with the highest interest rate first.

The Card Closest to the Borrowing Limit

Another strategy is to select the card that is closest to the borrowing limit. For example, if card #2 has a $3,000 limit, and you’ve charged $2,900, then you’re just $100 away from the limit. This is problematic for several reasons. First of all, that $100 isn’t really $100. Depending on your interest rate, your monthly finance amount for purchases and cash withdrawals may be anywhere from $30 to $70. If you forget that your available credit is significantly less than $100, and make a charge that exceeds the credit limit, you will incur an over-the-limit charge – and your interest rate is likely to go up.

Also, one of the factors that affects your credit score is credit utility. As you get close to your credit limit, your credit score decreases because lenders consider consumers who max out their cards to be risky. It should be noted that having a lot of credit cards open also lowers your credit score – and that’s another good reason to start paying off cards.

The Card with the Lowest Balance

From a financial standpoint, there’s no significant advantage to paying off the card with the lowest balance – although any type of credit card debt reduction is beneficial to your finance. However, it may be easier to pay off the card with the lowest balance because you’re closer to the finish line (and typically, the monthly amount is less). For example, if you’re paying almost $100 on card #1 (which has the highest interest rate), it might be difficult to increase your payment to $150 or $200. However, if the card with the lowest balance has a monthly payment of $30, it’s much easier to double that amount to $60.

Also, from an emotional standpoint, if you think paying off your credit cards is an unattainable goal, seeing that you’re making progress will help to build momentum.

Balance Transfer Option

Sometimes, you may be able to transfer a card with the highest balance to a card with a lower balance. Obviously, there are advantages to transferring a balance from a card with a 24% interest rate to one with a 10% interest rate. However, you need to be disciplined enough to avoid clearing the balance on the first card and then making more charges – which would defeat the purpose. (In fact, you need to resist the urge to continue charging on any of the cards, if possible.)

Also, it’s important to make all of your payments on time. Don’t forget that just one late payment can increase the interest rate significantly – and you’ll be right back where you started.

Other Considerations

When deciding which pay down method to use, don’t be swayed by artificial factors, such as the rewards a card offers – which could include airline miles or cash back. Rewards cards tend to have the highest average annual fees. For example , the average annual fee for an airline or cash back card is almost $150, while the fee for a rewards card is even higher. If it takes three years to earn free flight, but you’ve also paid 3 years’ worth of annual fees ($450) in the process – in addition to the monthly interest – is that free flight really worth it?

Once you pay off a card, you’re already in the habit of paying that amount each month (for example, $100 for card #1). Now, take that extra $100 and apply it to the monthly amount you pay for card #2, which will help you to pay it down quicker. Using this process is not a magic formula, but it has been proven to work. Check out these other money-saving tips.

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