Which card to pay off first?

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I keep reading that you should always pay the highest insterest rate card first but what if that has the lowest balance?

For example, if you owe £3000 on a 8% card and £1500 on a 10% card, is it still worth concentrating on putting as much as possible onto the £1500 balance and just paying the minimum on the £3000, when the monthly interest is greater on the larger balance?

Hope that makes sense!

Thanks :)

Comments

  • Degenerate
    Degenerate Posts: 2,166 Forumite
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    I keep reading that you should always pay the highest insterest rate card first but what if that has the lowest balance?

    For example, if you owe £3000 on a 8% card and £1500 on a 10% card, is it still worth concentrating on putting as much as possible onto the £1500 balance and just paying the minimum on the £3000, when the monthly interest is greater on the larger balance?

    Hope that makes sense!

    Thanks :)

    Highest interest first. Balance is irrelevant.
  • Apricot
    Apricot Posts: 2,497 Forumite
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    Have a look at the Snowball Calculator
    :happylove DD July 2011:happylove

    Aug 13 [STRIKE]£4235.19[/STRIKE]:eek: £2550.00 :cool:
  • talana
    talana Posts: 1,077 Forumite
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    For example, if you owe £3000 on a 8% card and £1500 on a 10% card, is it still worth concentrating on putting as much as possible onto the £1500 balance and just paying the minimum on the £3000, when the monthly interest is greater on the larger balance?

    Or to put it another way, £1500 on a 10% card and £1500 on an 8% card and ANOTHER £1500 on an 8% card.
    Now which will you pay off first?
    As post 2 said, balance is irrelevant. Highest interest first, every time.
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