Comments on: Reader Poll: Smallest Balance or Highest Interest Rate?

By: SJean

SJean — Tue, 31 Jul 2007 17:45:20 +0000

Generally highest interest rate, but if I had a small debt at a lower percent, I’d probably just pay it off for simplicity’s sake.

By: Reader Poll: The Results (Smallest Balance Or Highest Interest Rate)

Reader Poll: The Results (Smallest Balance Or Highest Interest Rate) — Tue, 31 Jul 2007 12:57:06 +0000

[...] In a recently poll, I asked readers to vote for the best method for reducing debt. [...]

By: James

James — Mon, 30 Jul 2007 17:10:02 +0000

One other comment I had –
I voted for the “higher interest rate”, but one thing I do to see progress is that in my personal net worth spreadsheet, I maintain the amount of interest paid in a given month. So, I can see that as I pay off higher interest rate debt, my interest paid per month continues to decrease.

By: Chief Family Officer

Chief Family Officer — Sat, 28 Jul 2007 03:23:20 +0000

Wow, 140 votes and it’s pretty much even! I went with lowest balance first, though if the balances were close, I’d actually choose the one with the higher rate. There’s just something so gratifying about paying off a debt!

By: ben

ben — Sat, 28 Jul 2007 01:11:35 +0000

I don’t really think the lowest vs interest is really the issue. The debt snowball is for people in debt trouble that really need to make a fundamental change in their lives. That means living on the bare minimum, selling belongings that are too expensive for their income, and putting every extra dollar towards their debt. In this scenario differences in interest rates really don’t matter very much. Its small but there is also the risk associated with open accounts, late fees, creditor errors, hidden charges etc…