Personal Finance and Investing

CORRECT method is: Pay down the one that is COSTING THE MOST IN FINANCE CHARGES/interest! It may be a student-loan that's eating you alive, a high-interest credit card, or a low-interest card that has a high balance because you use it more because it has a lower interest rate. My grandfather used to say that paying interest was "buying a dead horse." The more "dead horse" you avoid buying, the better off you are.

While there is something to say for the psychological boost of paying off a smaller debt and being out from under it, while you're doing it, the debts that are killing you with interest continue to kill you with interest compounding. Get out from under the one that's killing you the most!