But when the uncertainty subsides, you'll one day be ready to think long-term again. Once you're ready to pay off debt for good, you should be aware that there is actually a rule some abide by that can make it far less daunting.
asked Bruce McClary, a spokesman for the National Foundation for Credit Counseling , about what debt you should pay off first when you have both credit card debt and student loan debt. Here's what he had to say.If you're wondering how to strategize long-term debt management, McClary says, "The most basic rule of thumb is: What debt is costing you more in the long-term?"
To answer this, consider the interest rate on your credit card and the interest rate on your student loan. Because credit card debt, by nature, is most likely the highest interest debt that you're paying, McClary suggests paying that off first if you are someone who carries a balance on your card from month to month. As the credit card debt is higher interest"Get that out of the way," he says. "Pay those balances down [and] find a way to accelerate the repayment of that debt."argue that paying off the lowest balance is actually more helpful than focusing on the highest APR.
Rules are tools of oppression.
Well, most basic rule of thumb would be not to have in the first place.
I found that paying off the lower balance and then using the extra money to pay down the higher interest rate debt worked better for me. As long as the balance is going down, good for you.
cool
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