Which CC to pay first?

[wikiwiki]

We have 2 balances:
$1600 with a 14% rate and 8000 limit
$6500 with 1.99% promo rate until 10/10 and a 8800 limit

Is it best to pay down the high interest first, or get the high balance down to a more acceptable ratio?? We have recently bought a house so we won't need to borrow anytime soon (ie so credit score is not a major issue at this point in time) Last check a few months ago it was 750-770.

Thank you!

[creditcardfree]

Since you aren't worried about your credit score, I would pay off the first card that has the highest interest rate. Luckily it has the lowest balance, so you won't be paying that for too long.

Are you going to be able to pay off the larger balance by Oct 2010? What will the interest rate if you don't?

[wikiwiki]

That's what I was thinking too. I hate paying more interest when I have the money to pay down the debt!

We should be able to get the high balance to 0 by Oct 2010, if not earlier, otherwise the rate goes to around 15%.

[cptacek]

I would do the $1600 debt first, and then $6500 debt.

It will free up the cash flow from getting the first debt paid off, and you can snowball it. It is currently costing the most interest. And, you say you can pay both off before next October, so this makes the most sense mathematically.

[Mydebtregret]

I agree with cptacek, pay off the highest APR first, then you should be able to get the other card down low enough to not be affected by the APR increase in Oct 2010.
Good Luck! Good job on the credit score BTW.

[jasonnoguchi]

Definitely higher interest first.

[etransue]

Another vote for high interest first. When I worked my way out of debt I liked to pay off the one with the lowest balance first so I could have a "win" on my scorecard. In your case the lowest balance also has the highest rate. Win/Win!