What should I pay off first?

[Jamesww]

Originally Posted by Dave1215

The key to #2 is when that first bill is paid off, to keep making the same level of payment, just transfer it to the next smallest debt.

Believe it or not the number 2 option not only feels better but will cost you less in total outlay.

[8 SNAKE]

Originally Posted by Jamesww

Believe it or not the number 2 option not only feels better but will cost you less in total outlay.

How?

At best, your cash outlay would be the same between options 1 and 2. That would require your highest interest rate to be on your lowest balance, and then subsequent rates and balances to be the same way.

[Dave1215]

Originally Posted by Jamesww

Believe it or not the number 2 option not only feels better but will cost you less in total outlay.

Not sure I believe that, I would have to see the numbers. I am a big believer in #2, but I've never believed it to be the cheaper option from a pure financial perspective.

The key to Option 2 is never skipping a payment and not slowing down on the payments as the small debts get paid off.

Option 2 is built around motivation and actually seeing the progress of creditors going away and you mailing fewer checks. When each of those small debts is paid that is a MAJOR emotional milestone and keeps you motivated to do the next one.

But, not sure its cheaper.