Nicole Lapin

Which card is charging you the most interest every month?

That is the one that we're going to target first.

This is also where you figure out how much of your monthly payment is going toward interest versus actually reducing your balance.

And for many people, that number is so, so frustrating, but it's also so motivating.

If you have multiple cards, automate extra payments to the card with the highest APR first.

Once you know which card is charging the most interest, make a plan to hit that one the hardest.

This is called the debt avalanche method compared to the snowball method, and it is the most cost effective strategy for paying off debt.

It's the one that I used.

Next, look into balance transfer cards or personal loans to consolidate at a lower rate.

If your credit is in decent shape, you might be able to refinance a debt to a lower interest rate, which could save you thousands of dollars and help you pay it off faster.

There are two common ways to do this, balance transfer credit cards and debt consolidation loans.

Balance transfer credit cards offer 0% interest for a promotional period, usually 12 to 21 months.

If you're approved, you move your existing high interest balance

to the new card and pay it off interest free during that window.

Just be sure to check for transfer fees, typically three to 5%, and make a plan to pay it off before the promo period ends or your rate could skyrocket.

Debt consolidation loans are fixed rate personal loans used to pay off credit cards.

The benefit is that you're trading variable high interest rate debt for a single monthly payment

at a lower predictable rate, usually between 6% to 12%, depending on your credit profile.

Check out sites like LendingClub, SoFi, and Credit Karma to compare offers.

But of course, read the fine print and watch out for origination fees.