 TITLE: Credit Cards vs. Loans: Which Should You Pay Off First? CONTENT: Paying Off Credit Card Debt\n---------------------------\nIf you have several credit cards, first make a list of your current balances, APRs, minimum monthly payments and due dates. That will help you figure out how to begin your payoff journey. Here are a few paths you can take:\n*   **Debt avalanche method:** The most cost-saving payoff method is to target the credit card with the highest APR first, also known as the debt avalanche method. Using this strategy, you pay as much as you can on that card while you pay just the minimums on the rest of your cards. Once you pay off that card, you'll move to the card with the next-highest balance and employ the same strategy until all your cards are paid off.\n*   **Debt snowball method:** You might prefer paying off small balances first, which is known as the debt snowball method. Doing so won't save you as much money as paying off credit cards with the highest APRs first, but it can be effective if experiencing a series of small wins—by paying off accounts more quickly—encourages you to continue attacking debt.\n*   **Balance transfer credit card:** If you have good or excellent credit, you may also qualify for a balance transfer credit card. This gives you the opportunity to move multiple credit card balances to a single card, potentially at 0% APR for a period of time. You can pay off debt interest-free if you get rid of the balance by the time your promotional period ends—a crucial component of the strategy so you can avoid paying a much higher standard APR.\nAs an added bonus, paying off credit cards can also help improve your credit scores. The amount you owe on your credit cards compared with your total credit limit makes up your credit utilization ratio. Experts recommend limiting your utilization to 30% or less at all times to keep your scores strong, or below 7% for top scores. The more you pay down credit cards—without adding to debt—the lower your credit utilization will be. END