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Which debt should I pay off first?

Pay the minimum on everything, then send every spare unit to the debt with the highest interest rate. That is mathematically the cheapest route. It usually beats paying the smallest balance first by a surprisingly modest amount — often less than one month's payment — so if finishing something quickly keeps you going, that trade is worth making.

The two methods

Both start the same way: minimum payments on everything, so nothing defaults. The question is only where the spare money goes.

Highest rate first. Everything spare attacks the most expensive debt until it is gone, then rolls onto the next most expensive. This costs the least, always, because you are killing the fastest-growing balance first.

Smallest balance first. Everything spare attacks the smallest debt regardless of rate, then rolls onto the next smallest. This costs more, but you clear an entire debt sooner, and the list gets shorter faster.

How much the choice actually costs

The argument between these two is louder than the stakes deserve. A worked example, with the arithmetic run properly:

Two debts — 1,000 at 8% and 3,000 at 24% — with 400 a month available in total and minimums of 25 and 75.

Method	Time to clear	Total paid
Highest rate first	12 months	4,367
Smallest balance first	13 months	4,523

The difference is about 157, on 4,000 of debt, over a year. Real, but not the chasm the internet argues about.

That gap widens when the expensive debt is also the large one, and narrows when your debts are similar in size. If you have one card at 24% and one at 22%, the methods are nearly identical and the argument is purely academic.

So which should you use?

Run the numbers for your own debts — the difference is usually small enough to be worth knowing precisely rather than assuming.

Then be honest about yourself. If you have started before and stopped, the plan that keeps you going is worth more than the plan that is 150 cheaper. Clearing a whole debt in month three is a real psychological event; watching a large balance drop slowly for a year is not.

If you have never had trouble sticking to something, take the cheaper route. There is no prize for making it harder.

Two things that beat both methods

The rate itself. Getting a 24% debt moved to 12% halves its cost, which is a larger effect than any ordering decision. Ask your lender for a lower rate — people rarely do, and it sometimes works. Look at whether a balance transfer or a lower-rate loan genuinely helps, allowing for fees.

The payment size. How much you put toward debt each month matters far more than the order. Going from 150 to 250 a month on a 3,000 balance at 22% takes it from 26 months to 14, and saves more than either method choice will.

One thing that is not optional

Whatever order you choose, keep a small buffer — one month of essential spending, or a modest fixed amount. Attacking debt with nothing behind you means the next unexpected cost goes straight back onto the card, and you have paid interest for months to end up where you started.

That is not a reason to save instead of repaying. It is the thing that makes the repaying stick.