When paying off credit card debt, it is generally best to pay off d) low balance, high interest cards first. This strategy allows you to eliminate smaller debts quickly while also focusing on the cards that are costing you the most in interest. This approach is often referred to as the "avalanche method" for prioritizing payments. While the "debt snowball" method (paying off low balance debts first to gain momentum) can also be effective for motivation, from a purely financial perspective, targeting high-interest debt is typically the most efficient way to reduce total interest paid.
When paying off credit card debt, it is best to pay off___ cards first
a) high balance, low interest
b) low balance, low interest
c) high balance, high interest
d) low balance, high interest
1 answer