A very common question that comes up all the time when a person wants to start getting their credit card debt under control is whether to pay the high interest credit card first or to get rid of the high balance credit card first! This is a situation which does not fall under the domain of help provided by the debt relief companies by services like credit card debt consolidation or credit counseling etc. At one end if you are anxious about having high interest credit cards that costs you every month and compounds the monthly amount you owe, if you are not paying off the entire balance. For some the interest rate may go up to even 30% on the amount borrowed which basically means agreeing to pay one third more for everything you bought on the card or more depending on how long you owe. While on the other hand, you have a credit card, with such an overwhelming balance that no matter what are you paying, the balance does not seem to ever go down. Thus even if you have a low interest rate you may be paying a lot of interest because of your high balance.
So deciding about which one to choose to pay over the other can be the trickiest question of the moment especially for those who are not particularly great in handling their personal finances. The card holder tends to feel whether he will lose out on picking the right option first! As every dollar counts and is to be used most effectively, however, sadly enough these thoughts of saving penny never occurs at the times of our frivolous spending sprees! Anyways, this is the situation when a consumer often feels most frustrated and puzzled about their personal finances. The answer actually does not exist in this particular condition as the decision varies to either choose the credit card with highest interest rate or to choose the card with the highest balance depends upon the financial urgency and situation of the card holder. For example for someone who is neck deep in credit card debt, it is most important to take an immediate action than choosing between the two options which actually have a similar consequences at either cases.
So deciding about which one to choose to pay over the other can be the trickiest question of the moment especially for those who are not particularly great in handling their personal finances. The card holder tends to feel whether he will lose out on picking the right option first! As every dollar counts and is to be used most effectively, however, sadly enough these thoughts of saving penny never occurs at the times of our frivolous spending sprees! Anyways, this is the situation when a consumer often feels most frustrated and puzzled about their personal finances. The answer actually does not exist in this particular condition as the decision varies to either choose the credit card with highest interest rate or to choose the card with the highest balance depends upon the financial urgency and situation of the card holder. For example for someone who is neck deep in credit card debt, it is most important to take an immediate action than choosing between the two options which actually have a similar consequences at either cases.
No comments:
Post a Comment