The Best Way to Pay Off Credit Cards

One way to pay off credit cards is to start with the highest interest cards first, while another is to make low balance cards your priority -- getting them paid off can give you a boost of confidence to keep going forward with your debt management.


One of the reasons credit card debt tends to get out of control is that exorbitant interest rates make it difficult to eliminate debt by making only the minimum monthly payments. ABC News consumer correspondent Elisabeth Leamy recommends paying minimum balances on all but one credit card while putting extra effort toward the one with the highest interest rate. This saves you money over the long run because you are eliminating the highest-priced debt first.


If your interest rates are sky-rocketing, it may be worthwhile to transfer existing credit card debt to a lower-interest card.

Low-Balance Cards First

Paying off small-balance cards first allows you to see immediate positive results and be encouraged to continue moving forward with your debt elimination plan. Using this formula, you pay minimum balances on all but one card, putting extra effort toward paying off your card with the smallest balance. While this approach can give you a mental boost, crunch the numbers -- it could be more costly in the long run than paying off the highest-interest card first.

Snowball Method

Regardless of which credit card pay-off method you choose, use the snowball method for paying off debt faster. Each time an account is paid off, take the amount you were paying per month on that card and apply it toward the next card on your payoff list. For example, if you were paying a hundred dollars per month toward credit card A and $100 a month toward credit card B, once card A is paid off, start paying $200 per month toward card B until it's paid off as well. Continue the cycle until all of your debt is eliminated.


Paying off credit card debt helps improve your credit score and improves your debt-to-income ratio.