allocating payments to C/C

paulhm_2

i have 4 credit cards with balances of between £600 and £2300,i can afford to pay off £200 per month on top of the minimum payments,what i would like to find out if anyone has any ideas,is would it be better to pay the full £200 per month off 1 card at a time.or divide it between all 4,equally or pro rata? i remember seeing a method of working out how much to pay off each depending on the amount outstanding but cant remember what it was.any advice would be much appreciated.(one card has a 12 month interest free period on it )

mjm3346

Mainly depends on the interest rates, paying off the highest rates first generally would be best.

stephane_2

I would put as much as possible on the highest interest credit card until paid in full, pay the minimum on the others and once one has been paid off, do the same for the next one.

Tixy

Agree with the others, usually the advice is to clear the one with the highest APR first, so all overpayments to that.

Sometimes people try to clear the lowest balance card first in the hope that their card provider will then give you a promotional deal to BT a high rate debt onto 0% or low life of balance. Obviously whether this is suitable would depend on the provider of your lowest balance card and the card limits - however to give you an idea of the deals being offered to people at the moment you could look at this thread - http://forums.moneysavingexpert.com/showthread.html?t=33

Apricot

Use this to calculate what you should pay off first. It'll also give you a debt free date which is a great motivation.