Previously I recommended 6 different plans of action to consider if you want to conquer your debt. Let’s talk about the first option: tackle just one card first.

There are two sub-options to consider here. You can either tackle the card with the highest interest rate or the one with the highest utilization rate.

I know, I know, you’re probably wondering what the heck a utilization rate is. Don’t worry, I’ll explain that in a bit.

Let’s start with comparing interest rates:

Gather one statement from each of your credit cards or log in to your online bank account and download a digital copy of your statements.

Depending on who your issuer is, your statement should have a column that lists your payment due date, the minimum payment, your balance as of the date the statement was issued, your previous balance, and your interest rate. Forget all those other numbers and just focus on the interest rates for now.

This is what it looks like on my Scotiabank statements:

As you can see, my AMEX card had* a much higher interest rate than my VISA.

Now let’s take a look at utilization rates:

Your utilization rate can be calculated by taking the balance on your credit card and dividing it by the card’s limit. For example:

The final balance on my AMEX was $5,035.66 and my limit was $5,000.

5,035.66 ÷ 5,000 = 1.00%

The final balance on my VISA was $3,540.26 and my limit was $5,500.

3,540.26 ÷ 5,500 = 0.64%

The card with the highest utilization rate is likely doing the most damage to your credit score, while the card with the highest interest rate is hurting your bank account the most.

Since my AMEX had both the higher interest and utilization rates, I knew it was the best card to tackle first. It was destroying my credit and the minimum payments were large enough to leave a substantial dent in my bank account each month.

Take a look at your cards and their interest and utilization rates. Decide which is more important for you and your situation, and focus on paying off just one card for the time being.

Don’t forget about your other credit cards though! Make sure you’re making payments on them, even if it is just the minimum for now. Once you’ve lowered the balance on the card you’re focusing on, it will be easier for you to start putting extra payments on ALL of your credit cards.

I’ll discuss option two next. Options one and two go hand in hand, so stick around!

*I no longer have the AMEX card.