In What Order Should I Pay Off My Credit Cards?

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When you have multiple credit cards, it's more effective to focus on paying off one credit card at a time rather than spreading your payments over all your credit cards. You'll make more progress when you pay a lump sum to one credit card each month.

Even though you put most of your effort into paying off one credit card, you should continue to make minimum payments on all your other credit cards to avoid late payment penalties and to keep your accounts in good standing. The tough part is figuring out which credit card you should focus on paying off first.

The Two Basic Ways to Pay Off Credit Cards

There are two basic ways to pay off credit cards: either by paying off the credit card with the highest interest rate first or by paying off the one with the lowest balance first. To decide which strategy is better for you, think about whether you'd like to save money on interest or get rid of entire credit card balances quickly.

Save Money on Interest

If you'd rather save money on interest, then pay your credit cards starting with the highest interest rate balance first. Paying off the highest interest rate balance first may take less time and allow you to save money on finance charges, especially if your highest interest rate credit cards also have higher balances.

Make a list of your credit cards, ranking them in order from highest to lowest interest rate. Then, pay off the credit card with the highest interest rate first by making high lump sum payments to that card each month. Once you pay off the credit card with the highest interest rate, move on to the card with the next highest interest rate. Repeat that process, until all the credit cards have been paid off.

Note

Open a credit card offering a 0% APR balance transfer deal for new cardholders, to save even more money on interest. If you're interested, check out our top picks for balance transfer cards to get started.

Also, check with your existing credit card companies since one of them might offer a 0% or near 0% balance transfer from another credit card. If you have a zero balance on that card, you can transfer the high-interest credit card balance to the existing card without the need to open new credit. If the existing card isn't paid off yet, you can pay that one off first and then transfer the other high-interest balance to the existing card at the 0% rate.

Pay Off an Account Faster

If you wish to get rid of the credit card balance quickly, then pay your credit cards starting with the lowest balance first. When you pay off smaller balances first, you feel like you're making more progress, since you're knocking out an entire credit card balance. This progress can keep you motivated to stay diligent with paying off your accounts. For example, if you have a $500 credit card balance and $500 extra in a paycheck, bonus, or tax refund, you could pay off an entire credit card and have one fewer account to think about.

Exceptions to the Rule

Depending on your credit cards, there may be some exceptions. For example, if you've opted out of an interest rate increase and you close or cancel your credit card account, you can be required to pay off the balance within five years. All things being equal, paying down the balance will avoid hurting your credit score. If you have balances with deferred interest, pay off those balances to avoid being hit with all the interest charges at the end of the promotional period.

Keep in mind that interest rates can change, particularly if you have a variable APR or get hit with the penalty APR.

Is One Method Quicker?

When it comes to the amount of time required to pay off your credit card balances, there isn't a huge difference between the two methods. Paying in order of interest rate will typically allow you to pay off your accounts a few months earlier than paying in order of balance, and you'll pay less in interest charges.

You don't have to choose either of those two methods. You can pay off your credit cards in whatever order makes you happy. You can alphabetize them by credit card issuer or get rid of the balances on cards you're not using anymore. The ultimate goal is to pay off your credit card balances by making a lump-sum payment to one credit card each month until that balance is repaid. In the meantime, be sure to make minimum payments on all your other credit cards.

Frequently Asked Questions (FAQs)

Which credit card should I pay off first to improve my credit score?

Your credit score is impacted by your credit utilization ratio, which compares how much credit you have to how much you are using. If you have a card that is maxed out or over the limit and you're concerned about your credit score, consider putting your efforts toward lowering your balance on that card.

Could paying off a credit card hurt my credit score?

Paying off a credit card and closing it could cause your score to go down temporarily because closing an account reduces the amount of credit you have been extended. Your score should rebound once it becomes clear that you're not taking on more debt.

How long will it take to pay off my credit cards?

The answer depends on how much you owe and how much money you have to put toward paying them off. There are online calculators to help you estimate the time it could take, and useful tools you can use to organize your debts.

Updated by
Jess Feldman
jess feldman in a white shirt
Jess Feldman has been writing and editing for over five years, and currently focuses on financial topics. As an associate editor on the special projects team, she writes, edits, and develops tentpole brand projects across a variety of platforms. Since joining the financial space, she's developed an interest in finding ways to make the complex topic of finance relatable to younger generations, specifically via TikTok. Jess has a journalism degree from the University of Maryland Philip Merrill College of Journalism.
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Sources
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Consumer Financial Protection Bureau. "How to Reduce Your Debt."

  2. Consumer Action. "CARD Act Fact Sheet," Page 2.

  3. U.S. Congress. "H.R.627 - Credit CARD Act of 2009."

  4. Experian. "Which Debts Should I Pay Off First to Improve My Credit?"

  5. Experian. "Does Paying Off a Credit Card Lower Your Credit Score?"

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