You’re ready to pay down your credit card debt, but you carry a balance on multiple cards. What should you do: Pay off one card? Which one? Pay down them all equally? Stagger the payment amounts? Consider these tips to help you decide whether it’s best to pay off one credit card, or work towards paying down multiple cards at the same time.

Understanding Your Debt-to-Credit Ratio

Your debt-to-credit ratio (also known as a debt utilization ratio) equals your debt divided by your total credit, which might be the sum of several lines of credit.

Your debt-to-credit ratio is an important factor in determining your credit score. It’s best to keep your debt-to-credit ratio low; you should aim to have the sum of your balances equal 30 percent or less of available credit.

Pay Off High-Interest Credit Cards First

Pay at least the minimum payment on all credit cards each month to avoid penalties. After that, work toward paying off the debt on the card with the highest interest rate. While some advocate for paying off your smallest debt first because it seems easier, you’ll save more on interest over time by chipping away at high-interest debt.

One caveat: If you are close to the maximum credit limit on one card, start by paying down that card so that the interest charges don’t send you over your credit limit, resulting in fees.

What About 0% APR Credit Card Offers?

Many credit cards have 0 percent APR introductory offers. Transferring your balances to cards with a zero percent intro APR can give you the chance to save on interest while paying off your debt. But read the fine print. Some credit cards charge a “balance transfer fee” usually based on a percentage of the amount being transferred. Also, learn how long the offer is good for — once it expires, your interest rate will increase and you could be charged accrued interest if the balance hasn’t been paid in full before the introductory rate expires. Be sure to read all the details.

Published April 4, 2016

Updated January 11, 2021

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