My apologies in advance on the poor lighting. Still working on that…
When you’re in debt and you have managed to save a bit of money, by far the best investment the majority of people can make is to put it toward credit card debt. First, the interest rate that is being paid on the credit card debt is likely much higher than any return you can get from a standard investment. Secondly, there is absolutely no risk in getting the return — it’s 100% guaranteed. In addition, there is no tax paid on the return. The question is how to get the best return when you have a number of credit cards.
Some recommend that you pay off the credit cards with the lowest balance first for “psychological reasons” by making it appear that you are paying off your debt quicker, While others (including me in this camp) believe you should pay off the highest interest credit cards first.
As with many issues in personal finance, you’ll need to decide which method is more beneficial for you. The key here is to make sure that you use the savings you receive from the painless saving exercises we give to begin paying down this debt.