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STEP 5:
Which Credit Cards Do I Pay Off First?
Our Debt Ditch Creative Payment Methods


Deciding which credit cards to pay off first takes creative payment methods.



Financial advisors differ on the monthly payment methods they recommend for paying off credit card debt.

We offer three creative payment options for debt and financial management planning. Two are payment options recommended by many experts. The third is our Debt Ditch recommendation. We think it combines the best of the others and offers the quickest way to eliminate credit card debt.

Your first step in this process is to list all of your credit cards on a sheet of paper or on a computer spreadsheet.

You will need 6 columns:

1.   Name of the credit card.

2.   Total amount owed on that card.

3.   Interest rate charged on that card.

4.   Minimum payment due this month.

5.   Months to total pay out - Divide the total amount owed by the minimum payment amount to find out how many months it will take you to pay off that card. We call it MTP (months to total pay out).

6.   Monthly payment date (you will need this a bit later )

Read over our creative payment methods and decide which you think will work best for you.

As each card is paid out, stop using it. The more credit cards you use, the greater the chance of forgetting to make a payment and beginning that cycle of late fees and over the limit fees again.

Equally important, if your credit rating is poor, or not as healthy as you would like, paying off a credit card and keeping it at a $0 balance will begin to improve your credit score. You are showing the financial world that you can manage and get rid of your credit card debt and it will definitely work in your favor.

Don't close your account once the card is paid off. You need the account to remain open to improve your credit rating.

Monthly Payment Methods # 1 -
Pay Out High Interest Cards First

Many experts advise that the best way to eliminate credit card debt is to pay off the card with the highest interest rate first. If you decide to use this payment method, start by ordering your cards by listing the highest interest rate card first, down to the lowest.

If several cards have the same high interest rate, pay the smallest card off first. Why? When you use several credit cards it is much easier to forget a payment and incur late payment fees. Plus, as we said above, the sooner you can pay off even one card, the sooner your credit rating begins to improve.

Pay the minimum amount owed on all cards, but take the extra money you have found (if you haven't done that important step yet, look here) and put that extra money toward paying off the card at the top of your list.

* Using this method you pay off all of the high interest cards first.

Important!
Before you use this debt payment formula, look here for our other two creative payment methods.  











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To achieve financial freedom, ideas such as: listening to good advice, learning how to make a budget, understanding credit repair possibilities, avoiding the scams, and generally becoming more knowledgeable of the credit card business, can all play a role in eliminating credit card and other debt. There is A smarter way to manage your money.



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