is better to pay off two smaller credit card debts or pay a big chunck of a card with a larger debt?

is better to pay off two smaller credit card debts or pay a big chunck of a card with a larger debt?

Suppose you were given $500 (friendly relative), you have three cards with debt. On two of them you owe $250 and the last you owe $3,000. Is it better to pay off two credit cards that are $250 each,or pay the minimum on those cards and the rest towards your $3000 debt?

The Answer : Thats funny you mention this question on here, becuase I'm going through the same thing myself. I have 3 credit cards that I'm paying down, and I'm coming into some money that would pay off 2 completely and a portion of the 3rd, or ½ of the larger one and none of the other 2. It would depend on how much you're at the limit on each card.

If you're maxed on all 3, what you may need to do is split the $500 between all three. $175 each on the $250 ones, and the rest towards the $3000 one. At least on the 2 $250 accounts, you would only need to pay $75 each and then you're done with those cards. But in all reality it's up to you on which way you want to go.

Even if you pay $500 towards the $3000 one, your minimum payment would be at least $75 in addtion to paying the minimum on the other ones. At least by paying at least 70% on the 2 smaller ones, it gets you closer to paying both of them off and then focusing your attention on the bigger one. If the bigger one has a higher interest rate, then it may be in your best interest to pay it down.

But like I said, it's really up to you how you want to do it. Pay off 2 and then concentrate on another, split it up between the 3, or pay on the big one and leave the other 2. It your money, therefore it's your choice