What is the best strategy to pay off credit cards?

The best strategy to pay off credit cards is to repay the credit card with the highest APR first because you will minimize interest charges that way. Rank all your credit cards by interest rate and, after paying the minimum amount due for each, put the rest of your debt budget toward the card with the highest APR.

Best Strategy to Pay Off Credit Cards

1. Pay at least the minimum amount due on each credit card. 

As you’re working to bring down your debt, it’s important not to skip minimum payments on any of your credit cards because missed payments can bring down your credit score. Plus, you might get stuck with a penalty APR, which means you’ll end up having to pay more in interest than you already do.

2. Pay off the balance with the highest APR first. 

Check the interest rate section of your statements to see which credit card charges the highest interest rate, and concentrate on paying off that debt first. Paying off the balance with the highest APR first helps you reduce the amount of interest paid overall.

You can use WalletHub’s credit card payoff calculator to see exactly how much interest you would end up paying depending on how you distribute your payments.  

The only disadvantage of this strategy is that this could make it harder for you to stay motivated to keep paying down your debts.

3. Keep everyday expenses separate from revolving debt. 

Avoid adding new charges to revolving credit card balances because those purchases will start accruing interest immediately. Instead, try to isolate essentials such as gas or groceries on a separate credit card you can pay in full every month. This could allow you to avoid interest on everyday purchases entirely.  Alternatively, pay with cash or a debit card.

4. Repeat the process until all credit cards are paid off. 

Once you repay the balance with the highest APR, you should redistribute the bulk of your debt budget toward the card with the second-highest interest rate and follow the same principles.

This strategy results in the lowest possible interest charges, but there are other approaches you can take. For instance, some people find it more motivating to pay off the lowest balance first, since it means they can cross a credit card off their list faster. You can learn more from WalletHub’s full guide on how to pay off credit card debt.

You should also consider transferring some or all of your debt to a credit card with a lower interest rate. Typically, these credit cards have 0% introductory balance transfer APR offers if you transfer the balance within a certain amount of time after opening the account.

Notable Balance Transfer Credit Cards

Feel free to take a look at our editors’ picks for the best balance transfer credit cards available right now in order to weigh your options. You can also use our balance transfer calculator to estimate your potential savings.