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I am a student and have two credit card debts. One is for $1,500 with a high interest rate, and the other is $1,000 with a low interest rate. I have put together $800 to pay down these credit cards. Which credit card should I pay down first?

Last Updated: July 15, 2009

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It is usually recommended that you pay down the credit card with the higher interest rate first because you will save more money in interest over the long run. However, PowerPay, a free online financial tool, can show you how quickly you can get out of debt by snowballing payments. PowerPay can be found at www.powerpay.org.

For more information on power payments, go to www.extension.org/pages/Consumers Should Snowball Payments to Reduce Debt Quicker.

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