Saturday, July 18, 2015

Learn Which Debts You Should Pay First

Do you have several debts or loans to pay? Are you wondering which ones to pay first? This can be very challenging especially when a couple or more credit card companies are hunting you down every month. Most people go paying just the minimum on their debts. This may seem like a good opportunity for you to save money but the truth is this will just extend your debt much longer.

Some finance experts recommend paying off the smallest debt first. This is like just paying off debts within your means. As mentioned above, this won't create much savings for you because it has a snowball effect in the long run. For all you know, a small debt can have an extraordinarily high interest. If your goal is just to get one loan erased from your debts spreadsheet, this will be a good strategy then.

If you want to save the most money possible, it is best to pay your credit card loans with the highest amount you can afford. Your loan balance will be smaller this way and so the interest will be much lower too.  Regardless of what experts might advice, it is important to stick with the plan that you can consistently observe until all your debts are erased.