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Which is the Best Debt to Pay Off First? – Taylor

“Dear Steve,

I have some extra money this month and wanted to know which was the best way to go. Pay on the cards with the smallest balances or highest or is the better route the one with highest interest?

Taylor”

The Answer

Dear Taylor,

If you’ve come into some extra money I’d first suggest you save a third of it before you do anything if you don’t have a couple of thousand dollars at least in an emergency fund. Just put it in a boring savings account and keep it handy so unexpected future expenses don’t have to wind up on credit.

Then you may want to take the rest and apply it towards the lowest balance accounts and hopefully knock one out. You can then take those funds you would have sent each month on that debt you just killed and add it to your monthly payment you send your debt with the highest interest rate.

Getting out of debt is a slow and steady journey.

Please post your responses and follow-up messages to me on this in the comments section below.

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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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I want to keep you posted each weekday with just one email about the latest get out of debt news, scam alerts and information to beat back debt.

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After you subscribe, check your email to confirm your subscription. If the confirmation email does not appear in your inbox in a few minutes, check your spam folder for it. Sometimes it likes to annoyingly hide there.


  • It will keep you posted on the latest scams.
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