Which strategy is effective in reducing credit card debt?

Making larger payments on high-interest credit cards first is an effective strategy for reducing credit card debt because it minimizes the amount of interest accrued over time. When you focus on paying off the card with the highest interest rate, you reduce the total cost of borrowing and accelerate your path to becoming debt-free. High-interest debt can quickly accumulate, so addressing it first allows for more effective management of your overall debts.

Allocating your extra funds toward these high-interest accounts reduces the principal balance faster, ultimately decreasing the amount of interest you will pay in the long run. This strategy is particularly beneficial because it takes advantage of the interest savings, freeing up more money for future payments or investments once those debts are cleared.

Other strategies, such as only making the minimum monthly payments, do not effectively reduce the principal balance and prolong the debt due to accumulating interest. Similarly, switching to multiple new credit cards can lead to even more debt and potentially worsen financial health. Avoiding payments until savings are increased can lead to missed payments, increased interest, and damage to credit scores, making future financial recovery more difficult. Thus, focusing on larger payments toward high-interest cards is the most effective strategy for reducing credit card debt.