The Best Way to Pay Off Multiple Credit Cards -

When it comes to paying off credit cards, there are a lot of different methods that people use. Some people advocate for the avalanche method, while others swear by the snowball method. So which is the best way to pay off multiple credit cards?

The answer, it turns out, depends on a variety of factors.

For example, how much debt do you have on each card? How much interest are you paying on that debt? And what is your overall goal? Is it to get rid of your debt as quickly as possible, or to save money on interest payments?

There is no one-size-fits-all answer when it comes to paying off credit cards. But by understanding the pros and cons of the different methods you can make a more informed decision about which one is right for you.

Why You Should Pay Off Your credit cards

There are a few key reasons why you should focus on paying off your credit cards. First, carrying a balance on your credit cards can damage your credit score.

This is because your credit utilization ratio, which is the amount of debt you have compared to your credit limit, makes up 30% of your FICO score. So, if you have a lot of debt on your credit cards, it will drag down your score.

Paying off your credit cards can also save you a significant amount of money in interest payments. Credit card interest rates are notoriously high, and if you carry a balance on your cards, you’ll end up paying a lot of money in interest fees.

In fact, if you have a $5,000 balance on a credit card with a 20% APR, you’ll end up paying $1,000 in interest fees every year!

Finally, getting rid of your credit card debt can relieve a lot of financial stress. If you’re constantly worrying about how you’re going to make your minimum payments, or if you’re worried about going into debt, it can take a toll on your mental health. Paying off your credit cards can give you a sense of financial freedom and peace of mind.

How the Debt Avalanche Method Works

The avalanche method is all about paying off your debts from the one with the highest interest rate to the one with the lowest. This method is often recommended by financial experts because it can save you a lot of money in interest payments.

For example, let’s say you have three credit cards with the following interest rates:

Card A: 22% APR $1,000 balance

Card B: 18% APR $1,200 balance

Card C: 15% APR $1,300 balance

With the avalanche method, you would pay off these cards in the order of A, B, C. Even though Card C has the highest balance. For our example, we’ll assume the minimum monthly payment for each card is $50.

If you have an extra $100/month to put toward your credit card debt and attack it in this order, you’ll be debt free in a little over a year and pay a total of $433 in interest.

How the Snowball Method Works

The snowball method is all about paying off your debts from the smallest balance to the largest. This method is often recommended by financial experts because it can help to keep you motivated.

For example, let’s say you have three credit cards with the following balances:

Card A: 22% APR $1,200 balance

Card B: 18% APR $1,400 balance

Card C: 15% APR $900 balance

In this scenario, you would focus on paying off Card C first. This is because it has the smallest balance, and thus, you’ll be able to pay it off quicker.

Once you’ve paid off Card C, you would then focus on paying off Card A. And finally, once both of those cards are paid off, you would focus on paying off Card B.

With the extra $100 a month, it would take you a month longer to pay off the credit cards following the snowball method and cost you an additional $33 in interest. However, that $33 might be worth the motivation you’ll feel to keep going once that first card is paid off.

Additional Debt Payoff Methods

While the Debt Avalanche and Debt Snowball are the most common, there is one other Debt Payoff Method known as the Debt’Noreaster and the Snowflake Method.

The Debt Nor’Easter

It’s similar to the Debt Avalanche method but recognizes that certain debts or credit card balances might have some emotional baggage tied up in them.

So you would start with paying the debts off in order of highest interest rate, but move any emotional debt up the list to pay it off sooner, which can help with motivation similar to the snowball method.

The Snowflake Method

The snowflake method can be combined with any of the other methods. The idea is that any extra money you have throughout the month goes immediately toward whatever debt you’re currently focused on paying off.

Got a $20 rebate? Put it towards the debt. Found a $1 on the ground? Put it towards the debt. In this case, you would make multiple payments to the card throughout the month, every time you have extra money come to you.

How to create a plan to pay off your credit cards

If you’re ready to get started paying off your debt, the first step is to create a plan. To do this, you’ll need to gather some information about your credit cards, including the interest rates and balances. Once you have this information, you can begin to formulate a plan.

Choose what debt payoff method you will use and then list the debts in order that you plan to pay them off.

How to approach paying off multiple credit cards

If you’re looking at your credit card statement and feeling overwhelmed by the amount you owe, don’t despair. You’re not alone – many people carry debt on multiple credit cards. But the good news is that there are some steps you can take to get your debt under control.

One option is to consolidate your credit card debt into one card with a lower interest rate. This can save you money on interest payments, and it can also make it easier to keep track of your debt.

Another option is to focus on paying off one credit card at a time. You can do this by making the minimum payment on all of your cards except for the one with the lowest balance. Once that card is paid off, you can focus on the next one.

Whichever approach you choose, the most important thing is to create a plan and stick to it. With a little effort and discipline, you can get your credit card debt under control.

Credit Card Pay Off Calculators

If you’re trying to pay off credit card debt, you may be looking for a way to calculate how long it will take you. There are a few different ways to approach this, and the method you choose will depend on your specific situation.

One option is to use a credit card payoff calculator our favorite is unbury.me. This tool will allow you to input your credit card balance, interest rate, and monthly payment. It will then calculate how long it will take you to pay off your debt.

Another option is to create a budget and track your progress over time. This can be a more manual process, but it can be helpful to see your progress in black and white.

How to Save Money Paying Off Credit Cards

You can save money paying off credit cards by consolidating your debt onto one card with a lower interest rate. These cards are often referred to as balance transfer cards.

Balance Transfer Cards

And you’ll want to find one that offers you a 0% introductory APR for as long as possible. Because if you don’t pay off the balance by the time the introductory rate is over, you could be charged interest retroactively.

So while this can save you money on interest payments and make it easier to keep track of your debt, it can also be a bit risky if you don’t have a very reliable or steady income.

Consolidate with a personal loan

A personal loan is another option to consider when you’re trying to pay down your credit card debt. A personal loan allows you to borrow up to a certain limit and pay back the loan over an extended period of time. The advantage of this type of loan is that you’ll only have to worry about a single payment each month.

Though before deciding to go this route make sure the loan rates you’re quoted aren’t higher than the interest rates on your credit cards.

Stop Using Your Credit Cards

The last step you should take when you’re trying to reduce your credit card debt is to stop using them altogether. While they may seem like convenient ways to spend money, they actually add to your overall debt load.

And it can feel like each month you make an extra payment you’re taking one step forward and two steps back because of continued spending.

Make more than the minimum payment

When you’re trying to pay your credit card bills, you need to make more than the minimum payment. Try to increase the amount you’re putting toward your debts, even an extra $20 can really add up and help over time.

Apply Cashback to your statement balance

Cashback is a great way to earn some extra cash without having to do any work. You just need to sign up for a program that gives you points for every purchase you make. If you’ve built up some cash-back rewards when using your cards, see if you can apply it to your balance.

Tips for staying on track with your plan

While there’s no magic formula to getting out of debt, there are some things you can do to stay motivated and on track.

Keep track of your progress

It’s easy to get discouraged when you’re not seeing results fast enough. But keeping track of your progress can help motivate you to stick with your plan.

Use a calendar to track your progress

If you’re feeling overwhelmed by all your financial obligations, try breaking them into smaller chunks. For example, instead of focusing on your entire credit card debt at once, focus on making one small payment per week.

Track your expenses

If you’re struggling to come up with ideas for how to cut costs, start tracking your monthly expenditures. See where you can trim the fat from your budget.

Keep the end result front of mind

As you’re working towards paying off your debt, remember why you started in the first place. It’s important to know what motivates you so you can continue to move forward.

Have a reward for yourself when you finish paying them off

You might find it hard to stick to your plan if you don’t have something to look forward to. Set aside a little money each month as a reward for yourself when your debt has been paid off.

Remember: Debt doesn’t have to control your life. With these tips, you can learn how to manage your finances better and get out of debt faster.

Advice If You are Still struggling to Pay Off Your credit Cards

If you are struggling to pay off your credit cards, it is important to seek help and create a plan.

If you are struggling to make your payments, here are a few pieces of advice:

Talk to your creditors: Many creditors are willing to work with you to create a payment plan that fits your budget.
Create a budget: A budget can help you see where your money is going and where you can cut back in order to make room for your credit card payments.
Consider a debt consolidation loan: A debt consolidation loan can help you pay off your debt by combining all of your credit card balances into one monthly payment.
Seek help from a nonprofit credit counseling agency: A credit counseling agency can help you create a budget and a debt repayment plan.

The Bottom Line

Paying off credit card debt can be a challenge, but it is possible.

Paying off your credit cards can save you a lot of money in interest payments, and it can also improve your credit score.

If you’re ready to get started, the first step is to create a plan. You can use the avalanche method, the snowball method, debt nor’easter, and the snowflake method to pay off your debt.

Consider what will work best for you and your financial goals. Whichever method you choose, just remember that the more you pay each month, the faster you’ll be able to reach your goal!

Lot of hands raising and holding gold credit card, against white background

Frequently Asked Questions

Still have questions about the best way to pay off multiple credit cards? We’ve answered the most common questions below.

How can I pay off my credit cards faster?

There are a few things you can do to pay off your credit cards faster. You can focus on paying off one card at a time, make more than the minimum payment each month, or consolidate your debt onto one card with a lower interest rate.

Does paying off your credit card raise your score

Potentially, paying off your credit card will help improve your credit utilization ratio, which is a factor that is looked at when calculating your credit score.

Is it best to pay off credit cards or leave a balance?

It is best to pay off your credit cards in full each month. If you carry a balance, you will be charged interest on that balance. Try to make more than the minimum payment each month to help reduce the amount of interest you are charged.

What credit cards should I pay off first?

Likely either the card with the highest APR or the one with the lowest balance. Focus on paying off one credit card at a time, or you may want to consolidate your debt onto one card with a lower interest rate. Whichever approach you choose, the most important thing is to create a plan and stick to it.

How many credit cards should a person have

There is no set number of credit cards that a person should have. It depends on your financial goals and needs. You may want to consider having one or two cards for everyday expenses and another card for emergencies.

Or you may want to have several cards with different interest rates so you can transfer balances and save on interest charges. Ultimately, it is up to you to decide how many credit cards is the right number for you.

What is a good credit score?

A good credit score is typically anything above 700. However, your score may be lower or higher depending on your credit history and other factors.

Related: Is a Credit Score of 740 good?

Is it better to pay off debt or save money?

There is no right or wrong answer to this question. It depends on your financial goals and needs. If you are trying to pay off debt, you may want to focus on making extra payments each month. If you are trying to save money, you may want to focus on putting money into a savings account each month. Ultimately, it is up to you to decide what is best for your financial situation.

What if I can’t make my credit card payments?

If you can’t make your credit card payments, reach out to your creditor, they would much rather work with you to get paid than not get anything at all. You may also want to seek help from a nonprofit credit counseling agency

How can I raise my credit score by 100 points in 30 days

There are a few things you can do to raise your credit score by 100 points in 30 days. You can pay off your credit card balances, make more than the minimum payment each month, or get a credit limit increase. You may also want to consider using a credit monitoring service to help you keep track of your progress.

Is it better to pay off one credit card or reduce the balances on two

There is no right or wrong answer to this question. It depends on your financial goals and needs. If you are trying to pay off debt, you may want to focus on paying off one credit card at a time. If you are trying to improve your credit utilization ratio, you may want to focus on reducing the balances on two cards.

Best way to pay off a credit card to build credit

The best way to pay off credit card debt is to make more than the minimum payment each month. This will help reduce the amount of interest you are charged and help improve your credit utilization ratio.

Related: How to Start Building Credit

how to pay off credit card debt fast without a loan

There are a few things you can do to pay off credit card debt without a loan. You can make more than the minimum payment each month or transfer your balance to a card with a lower interest rate. You may also want to consider using a debt management plan to help you get out of debt.

Credit card debt can be a difficult burden to carry. If you’re struggling to make your payments, there are options available to help you get out of debt. With a little bit of effort, you can find a way to pay off your credit card debt and get back on track financially.

Are credit cards the best way to pay for things

Some people prefer to use credit cards because they offer rewards or points. Others prefer to use debit cards or cash because they do not want to incur interest charges. Ultimately, it is up to you to decide what is best for your financial situation.