Revisiting a Classic Question
I want to know what debt to pay off first. I have four credit cards, all with about the same interest rate, but with different amounts on them. Do I pay off the highest one first or the lowest one first? — J.B.
A good ol’ fashioned “which credit card should I pay off first” question that’s worth revisiting every now and then. Should you use the snowball method, or avalanche method? If the interest rate is the same across all your cards, the thing to do is the snowball method—tackle your smallest balances first, because you’ll eliminate it faster, and then you’ll have fewer payments to worry about every month. And then one day you won’t have to worry about making any payments. That’s really the American Dream.