In a recently poll, I asked readers to vote for the best method for reducing debt.
Number of votes: 182
Votes for Method 1 (Pay smallest balance first.): 87
Votes for Method 2 (Pay highest interest rate first.) 95
As you can see, the numbers are very, very close. With just over 52% of the vote, Method 2: Focusing on the account with the highest interest rate first, is winning. Personally, I used Method 1; Focusing on account with smallest balance first, because I enjoyed the psychological boost I received whenever an entire account was eliminated. Several readers left comments, and I’ll be using those comments in future posts. For now, I’m going to leave the poll open, and if you’ve yet to vote or leave a comment, feel free to do so.
I am trying the smallest balances 1st method. I did side by side comparrisons and projections. Both seem to have same effect about the same point in time. But having the small ones start going away sure feels good.