How to Pay Down Credit Card Debt- Help Please!! - Mothering Forums

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#1 of 3 Old 07-30-2014, 08:14 AM - Thread Starter
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How to Pay Down Credit Card Debt- Help Please!!

I am familiar with both the snowball and the avalanche methods of paying down debt. I have a question though. How do you pay off one credit card with multiple balances at different interest rates? I have 3 such cards and from my understanding the credit cad company applies the payment to the lower interest rate balance. If I am only paying minimum balances will anything over the minimum go toward the higher interest rate balance or does the whole payment go to the lower interest rate balance? If I never pay over the minimum balance with the higher interest rate balance just increase every month as interest is added?

My problem is these cards have my lowest interest rates as well as my highest interest rates. While I would love to hold off on paying off the lowest interest rates until other cards with higher rate are payed off I don't think it is possible, is it?

I have tried searching the internet for an answer to this question but had no luck so I came here. Also anyone use this calculator from vertex42?

I was trying to use it but ran into the problem described above with one card and two balances and didn't know how to enter it into the spreadsheet. Ideas?

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#2 of 3 Old 07-30-2014, 04:44 PM
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Is it possible to transfer the balance to a new card with a set (and hopefully very low) interest rate? Even if you were paying a certain amount for a transfer fee or whatever it is called, it might save you money in the long run.
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#3 of 3 Old 07-31-2014, 10:49 AM
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According to the Credit Card Accountability, Responsibility, and Disclosure Act of 2009, any payment above the minimum must be applied to the balance with the highest rate (it's on page 8 of the linked document).

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