 TITLE: Credit Cards vs. Loans: Which Should You Pay Off First? CONTENT: How to Determine Which Debt to Pay Off First\n--------------------------------------------\nTypically—though not always—the interest rates on loans are lower than on credit cards. Personal loans, auto loans and mortgages are examples of installment loans that you pay back with monthly fixed payments over a set period of time.\nIn addition to interest rate, you'll see the term APR (annual percentage rate) used for installment loans and credit cards. For installment loans, the APR reflects the total cost of the loan, including fees such as origination fees. For credit cards, the interest rate and APR are the same thing.\nThe average credit card APR as of November 2019 was around 17%; yours could be higher or lower depending on your personal credit profile when you applied. Personal loan APRs, for instance, start at 6%, though they can reach 36%, also depending on your credit and type of loan.\nTo find your own credit cards' or loans' rates, take a look at your monthly statements or contact your lender if you're unsure. Start by sending extra money to the debt with the highest APR—which will generally be a credit card. That way, you'll begin cutting down on the principal balance of your debt, and you'll pay interest on a reduced amount.\nMake sure whichever debt you decide to attack first, you continue paying your monthly bills on the rest of your debts to avoid missing a payment. A history of on-time payments is the largest contributor to a strong credit score. END