Question

Frank has four different credit cards, the balances and interest information of which are outlined in the table below. As Frank was developing a debt payment plan, Rick suggested that he pay off the credit cards beginning with the highest interest rate, working his way down. If Frank chooses to follow Rick’s advice, in what order should Frank plan on paying off his credit cards?

Credit Card
Balance
APR
A
$2,380
19%
B
$4,500
15%
C
$1,580
17.50%
D
$900
21%
a.
D, A, C, B
b.
D, A, B, C
c.
A, D, C, B
d.
A, C, D, B

Answer 1

Highest APR first: D (21%), then A (19%), then C (17.5%), then B (15%). Answer: a. D, A, C, B.