Credit cards can be addictive and one doesn’t realize how harmful they can be in terms of debts. If not controlled, one may fall into serious financial trouble. So the question arises do you want to pay off with highest interest rates or the cards with highest balance?

On the one and you have high interest  credit cards

High interest rates that bank is charging you doesn’t mean that it’s paying off your debts completely. In fact if you calculate interest cost, it’s actually higher than you borrowed.

It means that you end up paying more money than bank loaned you. Sometimes interest rates can be as high as up to 30%.  In simpler words, it means that you are supposed to pay one third more for goods purchased on the credit card.

On the other hand you have high balance cards –

Having cards with high balance means that no matter how much you spend, the balance is sufficient enough to keep you away from going solvent to insolvent. You will always have good money for rainy days.

Analysis Paralysis

It’s a hard question which must be answered after critical analysis of personal finances especially by those who fail to manage their money properly. Unfortunately there isn’t a perfect solution to everything. Individuals who are paying off high balance are considered winners, while, individuals paying off high interest rates have less advantage.

Analysis paralysis is a term used to describe where you have a lot of open choices and analysis them in depth but yet again you are unable to make any appropriate decision.

It doesn’t matter, just pick one!

If you’re drowning deeply with credit card problems then you need go ahead and take a stance against this. You need to take an action, it could be any, to try and hold your discipline with credits cards since you haven’t been at your best which is why you face this situation.

The easiest strategy for this would be, reach into your wallet and without looking grab the first card which you get hold off. This is the card you are going pay off first, do not worry how much you owe on this but get rid of the balance on it. You will feel great once you that you have zero balance on that card.

So which is the card you’re paying off first? One with the highest balance or the one with the higher interest? It’s the one you’ve grabbed first.