Figuring out which of several credit card balances to pay off first is tough. Do you pick the one with the highest interest rate? Or maybe it should be the one with the highest balance? Is there another factor you could consider?

Having too many choices makes it hard to make a decision and like many people, you may end up not paying any credit card at all. Don’t worry, there’s a solution.

Why Am I Picking Just One Credit Card?

Many people approach paying off debt by paying a little extra on all their credit cards each month. Unfortunately, when you try to pay off your credit cards this way, all your balances go down just a little bit each month. It’s frustrating and discouraging to put so much effort into getting rid of your balances, but not seeing as much progress as you expect. There’s a better way.

The most effective and efficient way to pay off credit card debt is to focus on paying off one balance at a time. You’ll pay as much as you can to one credit card while making only the minimum payment on all the other credit cards. You can get rid of a balance much faster this way than if you were to spread your payment on all your credit cards. Picking the credit card you want to focus on, however, is the tough part.

Here are some factors that can help you decide which of your credit cards you want to pay off first.

Pay off a credit card with an annual fee if you don’t plan to keep it.

There’s no point in paying an annual fee for a credit card that’s not benefitting you. Once you pay off the balance and close the credit card, you’ll no longer have to pay the annual fee on that card. That’s one less credit card and one less fee you have to worry about.

Pay the credit card with the highest interest rate first to save money.

High interest rate balances are expensive, particularly when the balance is also high. Make a list of all your credit cards so you can see what you’re working with. List also the balance and the interest rate for each of the credit cards. If you want to save money in the long run, pay off the balance with the highest interest rate first.

Pay the credit card with the lowest balance first to knock out debts faster.

It can take several months or even years to pay off a large credit card balance. Even when you’re tracking your balance, it can feel like you’re not making as much progress as you’d like. Paying off credit cards with low balances lets you get rid of entire accounts quickly. Some people need this motivation to avoid becoming discouraged with paying off debt.

Pay the credit card that’s affecting your credit to start working on your credit score.

If you want to salvage your credit score, you might have to take a completely different approach to paying off accounts. Some credit cards may affect your credit score more than others. Catch up on accounts that are currently past due to prevent more damage to your credit score.

Pay the credit card you hate the most to feel better.

Unfortunately, the relationship with our credit card issuers isn’t always smooth. If you’ve become unsatisfied with your credit card issuer, you might want to pay off that credit card right away. That way, you can close your account and completely sever ties with that company. While you may not save money on interest or get rid of any balances faster, getting rid of a company you don’t like can remove loads of stress from your life.

If all else fails…

There are lots of ways you can choose a credit card to pay off first, but if none of those particularly matter to you, just pick a card. Throw them all in a box and pull one out – that’s the one you’ll start paying on first.

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