Credit Basics
Debt Busters
Simple answers to help you pay down your bills and put away savings
Tuesday, January 01, 2002
Woman's Day
A: Most experts suggest putting the greatest amount of money toward bills with the highest interest rate.
"When you think about how much you're paying in interest over time," says Gabriel, "logically, it makes sense to pay these bills first".
Other exerts say that paying off small debts in the first few months has a great psychological benefit.
"Paying off a couple of smaller debts allows you to see immediate progress, and it frees up money to use toward bigger bills," says April Lewis, director of education for ConsolidatedCredit.org, a nonprofit agency in Fort Lauderdale, Florida.
The most important thing: don't miss payments. "Late fees average $29," says Kathy McNally, Ph.D., vice president for National Financial Literacy at the National Foundation for Credit Counseling, "so not only are you adding to your debt, but you risk slipping into the 'slow pay' category."
