Which debt to focus on next?

[annibe11e]

I'm working on paying down debt. At first I paid off the smaller balances. A couple of reasons for that are my ADD. I needed to see quick results to keep going. Also, we needed to free up those minimum payments in anticipation of some tight months. With that done, I'm now looking at paying the larger debts down by order of interest rate. I have 3 debts with the same interest rate - 10.75%

Credit card #1
$2400

Credit card #2
$3000

Line of credit
$6200

At this point I'm wondering if the order will have any affect on my credit. For instance, are lines of credit looked at any differently than credit cards? Is the line of credit included in the utilization calculation? Or is that just credit cards?

Is there anything else to consider? I should mention these credit cards have no fees or points/cash back. Purchases and cash advances have the same rates and we are not using these cards at all at this point.

I've got $55 coming my way from Zazzle sales and I'm excited to apply it to a debt!

[Jluke]

are you able to get a 0% transfer for the credit cards?




.

[annibe11e]

We are not. The $3000 card was actually a transfer from a 26% card. That's the best we can do right now.

[Jluke]

I can't speak to your concerns about credit score.

Since the rate is the same:

Mathematically, one would want to pay off the highest balance first.

Emotionally, pay off the lowest balance first.

Other: chip away at the highest balance to get it to a manageable level, say 1/2 of what it is now. then re-evaluate your plan.

All depends on how quickly you are able to wipe out each debt; can't tell from the info you have given so far.

[mo0n]

I'd pay off the smallest balance first, then roll that minimum payment into the next lowest, and so on.

[msomnipotent]

Paying your highest balance first may or may not help your credit score. It depends on how much of your available credit is tied up in those balances. Your utilization rate is your balances divided by your credit limits. Having a $6,000 balance with a $20,000 limit is ok. A $6,000 balance on a $6,000 limit is bad. If you are concerned with raising your score, paying according to utilization rate might be your best bet. I'm pretty sure Credit Karma has a program that shows you how your score would be affected if you paid off a certain amount, or opened (or closed) a credit line, etc. It might help you.

Personally, I would pay the smallest one first since they are all the same interest rate, and then snowball the payments.