Paying more than motnthly min...

[solvemybadcredit]

Yeah, I also don't get the whole Dave Ramsey worship thing. I don't agree with his idea of paying off the lowest balance debt first. Wrong - put the money towards the highest interest debts first. This way you will come out ahead. His advice seems purely emotional, and for a logical thinker like me it just doesn't fly. I couldn't care less about the so-called "emotional boost" of having one less debt. I care about the overall picture, and how much interest I'm paying. Paying down higher interest first gets me ahead. To me that's a bigger emotional benefit.

PS - I'm not in currently in debt, but if I were I wouldn't follow Dave Ramsey.

I love your theory. I always tell people to tackle the highest amount of debt with the highest interest rate. That's what I believe in. People just put off debt.

On the other hand: making more than the minimum payment is Ok, but if you are paying 75 and the interest cost is 86 monthly for example, then you will still end up paying interest on the top of the interest. If you can afford paying 75 a month, you might have a look at consolidating the card with a personal loan, so therefore you will know how long it will take you to pay off your debt.

It will not damage your credit rating, as well said before, the amount of credit and also prompt payments will have influence on your credit rating, and lenders will look at if you are working on reducing the debt.

[woodie96]

DRs advice works for a lot of people who are in debt because of emotion and impulse. The reason he does it that way is so they can begin to see some progress sooner, rather than just simply going with the highest interest first and working down.
What works for a logical type, may not work for an emotional type, and vice versa. But in the end, the final outcome is to get out of debt. Just may take the emotional type a little longer.

[woodie96]

Sorry about getting sidetracked in my last reply.

To pay above the minimum payment will actually improve your credit score, since after that additional payment, the utilization ratio will be lower.

Probably not low enough to see a change in the credit score, but over time will get better.