Credit Cards

Choose the Right Credit Card to Pay Off First!

Ryan Ong



Credit card bills: Like someone took a sledgehammer to the groin, found a way to package the pain, and then mailed it to you in triplicate. For anyone with multiple lines of credit, sorting through their bills is as pleasant as chewing rusty nails. With that many cards to pay off, which one deserves the most attention? With some help from, I explored some strategies for handling your credit card bills:


1. Pay Off the Card that’s Closest to the Limit

With this strategy, you always pay off the cards that are closest to their credit limit.

Any card less than 20% from the credit limit needs urgent attention. If (heaven forbid) you have more than one of these, settle the ones closest to their limits, in sequence. And then seriously rethink your spending habits…because unless you’re drawing huge amounts for investments, this shouldn’t happen in the first place. 

This strategy is useful for people who rely heavily on their credit score: Traders, private investors, or small business owners come to mind.

When you apply for credit, the banks check your existing records through the Credit Bureau of Singapore (CBS). If they see credit cards that are constantly maxed or near the limit, it can shake their confidence in your financial health. This might affect loan applications, and see elevated interest rates.


Needle on a valve, with a yellow area marked "danger zone"
“I don’t know if the new attachments to our credit cards are practical…”


2. Pay Off the Card with the Highest Interest Rate

This is the most conventional approach, and it’s well suited to the average consumer.

Rather than worry about the biggest balance, address the cards with the highest interest rate first. Put the minimum repayment on the card with the lowest interest; then pay three or even four times the minimum on a high interest card. Once you’ve closed off the debt, move on to the card with the next highest interest, and so forth.

An upside to this method is its sheer simplicity. Apart from checking your interest rates, there’s almost no paperwork involved. Note that, in the event interests rates are comparable, you default to tackling the largest balance.


Sticker on window that reads ""debt perception"
A subject of significant interest.


3. Pay Off the Card with the Lowest Balance

This strategy uses a “bottom-up” approach, closing off the lowest balances first.

The idea is that, with the lowest balances dealt with, you’ll have more cash to deal with the bigger debt. This method is great if you have multiple cards (four or more credit cards), but only one of them is a towering inferno of debt. It’s important that, as you close off the smaller debts, you maintain the same rate of repayments every month. This way, the repayments for the bigger debt will exponentially grow as you settle the other cards.

This method is psychologically reassuring; it visibly decreases the amount of bill reminders you get every month. Also, some people appreciate that upon paying the last debt, they will be completely debt free. There’s a sense of progress.


Lady playing whack-a-mole
Pictured: The essence of every financial model for fixing credit card debt.


4. Pay Off the Card with the Highest Credit Limit

This method is strictly for those who aren’t in serious debt.

Credit card companies like consumers to spend; the more you spend, the more they make on interest. You can prod them into action by drastically underutilizing your credit limit. Most of them will try to bait you; when they see you aren’t spending much, they’ll raise your limits in the hopes you’ll start using that card.

This happens to be very healthy for your credit score.

The next time you apply for a loan, it’ll be painless. After all, your high credit limit already proves how much they’re ready to lend you…and how little you may need it. Depending on the situation, this could translate to better interest rates.


Beggar with a business card
Your banker, when you refuse to use that credit card.


Ultimately, the best strategy for paying off your cards depends on your situation. A common concept throughout, however, is that you always pay more than the minimum. Check on MoneySmart for credit cards that best fit your situation, and stick to your game plan on repayments.

Image Credits:
Morning Glory
Tiger Girl

What’s your credit card repayment strategy? Comment and let us know!

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Ryan Ong

I was a freelance writer for over a decade, and covered topics from music to super-contagious foot diseases. I took this job because I believe financial news should be accessible and fun to read. Also, because the assignments don't involve shouting teenagers and debilitating plagues.