The question comes up all the time when a person wants to start getting their credit cards under control – Pay off the cards with the highest interest or the cards with the highest balance?
On the one and you have high interest credit cards – A high interest rate costs you every month and compounds the amount you owe every month you aren’t paying off the entire balance. High interest costs you for what you borrowed. For some people the interest rate can close in on 30%. That’s basically agreeing to pay one third more for everything you bought on the card (or more depending on how long you owe)!
On the other hand you have high balance cards – You’ve used the card so much that the balance may be in the thousands and no matter what you are paying the balance doesn’t seem to ever go down. Even if you have a low interest rate you may be paying a lot of interest because of your high balance.
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