Does it make sense to pay off the smaller debt first or attack the bigger debt?

[Jluke]

If its enough to pay off the highest rate debt, then pay that off. If not, pay off the smallest debts and then make bigger monthly payments on the remaining debts. You should have more money to pay off the remaining debts because you got rid of the other monthly payments.

In this case I don't think the snowball approach will work (my assumption is that minimal payment is being made each month on that small balance).

OP is better off putting the bonus towards the $2700 discover card balance so the interest doesn't keep piling up on that one.

[disneysteve]

Just to elaborate, the snowball method (paying lowest balance to highest balance) is never the best option mathematically. You will always save the most money in interest charges by going after the debts from highest interest rate to lowest interest rate.

The point of the snowball method, popularized by Dave Ramsey, is to motivate people to stay on track by seeing the number of debts drop off faster by knocking out the smaller ones first. Dave's view is that it isn't about math, it's about modifying behavior, and I think there's value to that approach. But if the question is which will get you debt-free the fastest and at the lowest total cost, the answer is always highest rate to lowest rate.

[bjl584]

OP's story changes every time he starts a new thread. I have no idea how much debt he actually has, what his overall financial picture looks like, or what sort of advice he is looking for. I have a feeling that there is a lot more to his situation than we know, and I think he is much worse off than we know as well. But, I'm not sure we will ever get the FULL story. And without it, we're never going to be able to help him.

[dojo]

Higher interest first to stop 'losing' money on a monthly basis. Or the smallest balance first, if a win would pump you up to attack the bigger debt. Whatever works for you, just pay off some of the debt and get ready to go after the remainder.

[Kaoru]

see if you can get a cheaper debt somewhere else, and consolidate all your debt into one with a consistent payment plan. that's the gist of debt consolidation. there's no such thing as cheap debt, but there's the idea of 'cheaper' debt. it's all about the negotiation.