We have about $5000 in credit card debt. We are currant on all of our payments. We are going to have an increase of income for about three months. So should we pay off the highest balance first or should we increase how much we pay to each the same amount(ie: double the monthly payment )?
What is your personality like? This is something to really give some thought to.
The typical FWF advice is to pay off the highest interest rate cards first, while making the minimum payment on lower interest cards. You could post your details if you want some more specific advice (ETA: income, individual card balances and interest rate, other debt, emergency fund / other savings, credit score, etc). There are some shenanigans you can pull if you really have good discipline, but these are not for the beginner nor those without a lot of financial discipline.
If you are the typical Dave Ramsey fan, then he recommends paying off the lowest balance card first so you gain some momentum and feel good about making progress on paying down your debt.
What is your plan to stay away from credit card debt in the future?
You should have at least one card on which you carry no balance. You charge new things on that card and pay that card in full. This way you avoid paying interest (45 days worth on average) on the new purchases.
Credit card companies love those people who are paying finance charges since they are able to start collecting finance charges from such people on day 1 of the new charge.
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