Debt Reduction- Advice On Credit Card Debt Reduction, Debt Reduction Services, And Debt Reduction Plans

Edward asked:


I have 4 credit cards, 2 with approx 500.00 each on them w/ min. monthly payments of between 15.00 and 30.00. I send them each 50.00. (both store cards, 1 @ 17% 1 @ 0% for 6 more months)
The other cards have approx 5000.00 each on them with min. payments of approx 200.00 I usually can only make the minimum payment on these. (Major c/c’s w/ average APR’s)

My budget currently allows me to take approx. 500.00 each month to dedicate towards debt reduction. My question is, is it better to pay off the lower balance cards (I won’t really notice the difference of the 100.00 per month I will save) or am I better off to send large chunks of cash towards the high balance cards to reduce their monthly payments.(and then continue to pay on top of that the 200.00 @ I am already putting there.) ?

Annmarie Klos

Schleppy asked:


I am trying to set up a debt reduction plan where I pay off the account with the highest interest rate first, then move to the next highest, etc. My question is, which interest rate on my credit card statement do I use for this prioritization? There’s an Annual Percentage Rate and an Effective Percentage Rate and then I think there was still another. On one of my cards, these range from like 8% to 29% depending on which one you look at. It’s a shame I’m such an idiot when it comes to these things ! Thanks for any help…

Bernard Myung