6 Smart Strategies for Prioritizing Multiple Debts (And Paying Them Off Sooner)

National nonprofit credit counseling agency Take Charge America offers practical guidance for managing competing financial obligations

PHOENIX--(BUSINESS WIRE)--When bills stack up, one question looms large: Which balances should you pay first, and which ones can wait?

Without strategy, juggling multiple debts can lead to late fees, higher interest rates and mounting stress. But with clear direction and a little patience, individuals can take small steps now that build financial stability over time.

“There is no one-size-fits-all approach to paying off debt, and personal circumstances play a big role in determining your path,” said Manuel Salazar, CEO of Take Charge America, a national nonprofit credit counseling and debt management agency. “General principles like staying consistent, saving smarter and proactively communicating, however, can help you reach stability sooner.”

Salazar recommends these strategies to navigate overlapping debts with clarity and confidence:

• Consider the snowball method. If motivation is the biggest challenge and you have several credit cards with similar interest rates, paying off the smallest balance first provides a quick win. Once the smallest debt is gone, take the money you were paying on it and apply it to the next-smallest balance. That momentum can make it easier to stay committed to your repayment plan, with the downside of interest continuing to stack up.
• Consider the avalanche method. The snowball method’s more mathematically minded cousin tackles the highest-interest debts first, paying those down aggressively while hitting minimums on other balances. This approach makes sense for people with higher amounts of debt. While it lacks the instant gratification of the snowball method, fewer dollars wasted on interest leads to long-term savings.
• Tread carefully with savings. While it can be tempting to drain savings accounts to pay off debt, balance is key. For example, aim to always have at least one month of “cushion,” then direct leftover money toward high-interest debts. As balances shrink, gradually shift more into emergency funds.
• Explore debt relief options. If balances feel overwhelming, you’re not alone. Nonprofit credit counseling agencies can help you determine which debt relief option is best for you based on your personal circumstances – at no charge. You may qualify for a debt management plan (DMP), which includes lower interest rates and consolidated payments.
• Communicate with creditors. Many lenders offer hardship programs, flexible payment plans or temporary relief. Reaching out before you fall too far behind gives you a better shot at finding relief.

For more personalized guidance, schedule a free credit counseling session with Take Charge America.

About Take Charge America, Inc.

Founded in 1987, Take Charge America, Inc. is a nonprofit agency offering financial education and counseling services including credit counseling, debt management, housing counseling and bankruptcy counseling. It has helped more than 2 million consumers nationwide manage their personal finances and debts. Learn more at takechargeamerica.org or call [phone].