 TITLE: Which Debts Should I Pay Off First to Improve My Credit? CONTENT: How to Pay Off Credit Debt\n--------------------------\nYou could pay off your credit card debt by paying down one card at a time (and making minimum payments on the other cards). Once the first is paid off, you take the freed-up funds and focus on the next card on your list.\nTwo ways you can create your debt payoff plan using this approach is to utilize the debt avalanche or debt snowball method. The debt avalanche method has you start with the highest-rate accounts first, which can help you save money. Alternatively, the debt snowball method focuses your efforts on the account with the lowest balance first. This strategy may be more motivating and easier to follow through with because it could allow you to pay off individual debts more quickly.\nThere are, however, additional strategies that might help you save money, improve your credit or get out of debt:\n*   **Balance transfer credit cards**: Balance transfer cards often offer a promotional 0% intro APR (annual percentage rate) on debt you transfer to the card. You can then pay down the balance without accruing additional interest during the promotional period. Many balance transfer cards charge a balance transfer fee, and it's common for this fee to be 3% or 5% of the transferred amount.\n*   **Debt consolidation loans**: You might be able to take out a personal loan and use the funds to pay off one or more of your credit cards. This strategy could lead to savings if you can qualify for a loan that has a lower interest rate than your cards do. Plus, moving the debt from a revolving credit card account to an installment loan will lower your credit utilization rate.\n*   **Debt management plans**: If you can't seem to get a handle on your credit card debt, a credit counselor may be able to help you get set up with a debt management plan (DMP). A DMP can help lower your payments and set you on a path to paying off the debt, but it also often involves closing your credit cards. END