4. Top down or Bottom up?

There are two ways to tackle debt; paying balances starting with the lowest outstanding balances, or paying debts off starting with the highest interest rates. For the first method, you should pay the minimum payment for all the debts you have, and pay extra towards debts with the lowest balance, gradually eliminating the smaller debts and then moving on and paying extra for the larger debts. The other method is similar with minimum payments made on all debts, but with extra payments made to the debts with the highest amount of interest applied. If your debt is mainly credit card debt, the second option is the most effective.