 TITLE: Should I Pay Off Debt With the Highest Balance or Highest APR First? CONTENT: How Paying Off the Highest-Balance Debt Works\n---------------------------------------------\nIn some situations, though, paying off the debt with the highest balance may make the most sense.\nFor instance, perhaps you're focusing on debt payoff because you're hoping to qualify for a mortgage or other loan in the near future. Reducing your balances fast and limiting your credit utilization could become your top priority, rather than saving money on interest. In that case, you'd attack the highest balance rather than the debt with the highest rate.\nHere's why: Credit utilization is the amount of debt you carry when compared with your credit limit. It's the second most important factor in your credit score after payment history, which means it can have a significant impact on whether you'll get approved for a loan in the future.\nExperts recommend keeping your credit utilization to 30% or less at all times, but the lower, the better. So, if your credit limit is $10,000 on the card with a $6,000 balance, for instance, your credit utilization rate would be 60%. To qualify for a mortgage, your best bet would be to pay down that balance ASAP and get your credit utilization below 30%.\nAt the same time, your credit limit might be far higher on the card with the highest balance, meaning your credit utilization rate could be minimal. Take a look at all your cards' limits and focus on bringing down the balance on the card that's closest to its max.\nAnother time when paying off a high balance could be best? If your highest-balance debt carries a promotional interest rate for a certain period of time. Prioritize paying off that debt before the card's standard interest rate kicks in. END