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2.2. Paying down debt on multiple cards

If you have more than one credit card debt, you should use the following approach to deal with them:

  • Always pay at least the minimum required on all the debts.
  • Focus on paying off the card with the highest interest rate first.
  • When that account is paid off, focus on paying off the card with the second-highest interest rate.
  • Continue until you have no credit card debt left.
  • Cancel any cards that you don’t need when they are paid off.
INSIGHT: Some people refer to these steps as the “domino” approach to debt because you knock one debt over at a time.

If you do have several cards, it’s also important to ask yourself if you need them all. Can you cancel any of the cards? Work out how much they are costing you and see if you can find one credit card that suits your needs.