Debt Management Q&A
Q: When I was young, I ran up large amounts of credit card debt. My financial situation has since improved and I am now in a position to pay off these credit card debts. What is the best way to pay off credit cards? Should I start with the card that has the highest balance?
A: Lowering your credit card debt can considerably improve your credit score. With a little dedication, you can take charge of your debt in no time. The most important thing is to develop a plan you know you can stick to. Simply make a list of your finances to determine how much you can afford to pay every month.
Though paying off balances one by one works, it's more beneficial to pay off according to the interest rate. Start by tackling the balances with the highest interest rate first, then move on to the payment with the next highest interest rate. This plan will allow you to pay off your debt sooner and will save you money over time, as you will spend less money on interest.
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