Tackling debt....Dave Ramsey...Suze Orman....others?

[juschuma]

Check out Motley Fool discussion boards on Credit Cards and Consumer debts. Great strategies for getting out of debt.

Motley Fool - Credit Cards and Consumer Debt

[Prelude008]

thanks all for the links. I will read though them.

[Big Bend]

I recently became 100% debt free.. its a GREAT feeling!

buy cheap, buy used, buy smart, buy less. good luck!

BB

[JuntMonkey]

I would always just pay the minimum to all of them, and then put all my leftover money to the one with the highest interest rate. Wouldn't matter how large or small the balances are.

[Thremp]

[ QUOTE ]
I would always just pay the minimum to all of them, and then put all my leftover money to the one with the highest interest rate. Wouldn't matter how large or small the balances are.

[/ QUOTE ]

There is a reason you are not in debt.

[gusmahler]

[ QUOTE ]
I would always just pay the minimum to all of them, and then put all my leftover money to the one with the highest interest rate. Wouldn't matter how large or small the balances are.

[/ QUOTE ]

Great idea. But, if the interest rates are similar, psychologically speaking, it might be better to get rid of the smallest balance first.

Let's say you have three credit cards. Two at 17%, one at 19%. The balances are 2000, 2000, and 10,000 (the 19% one). If you pay off the 10,000 debt first, you'll eventually get to debts of, e.g., 1800, 1800, and 6000. But if you pay off the low debts first, you have debts of 0, 0, and 9700.

Overall, you're in similar circumstances. But to some, the psychological impact of paying off 2 cards outweighs the $100 in interest you save. All depends on your personality, I guess.

[prohornblower]

I agree with that generalism. There is the mathematical factor of paying debt off, as well as the psychological factor.

Obviously, if one debt was $100 @ 6.00% and another debt was $1300 @ 8.25%, I would write a hundred dollar check, and be done with the one debt, then tackle the higher rate. It feels like I accomplished something, plus that is one less check to write each month.

Everyone's personal balance will be different, obviously. But I think there are instances where every one of us would pay off a lower rate first.