Hot take: paying off my smallest card first did nothing for my score

Everyone says to snowball your smallest debts first for motivation, but I paid off a $300 store card in February and my score went up maybe 5 points. Meanwhile a friend of mine paid down a chunk of a big card with a 90% utilization rate and jumped 40 points in the same period. Has anyone else seen better results from targeting high utilization instead of small balances?

4 comments

4 Comments

smith.nancy10d ago

Yeah that totally flipped my thinking too. I always went for the smallest balance first but after seeing my score barely budge I'm switching to paying down my highest utilization cards.

irisowens10d agoMost Upvoted

Oh man, you're on the right track now! But one thing to watch out for: paying down the highest utilization card isn't always the same as paying the highest APR. Utilization is based on your credit limit, so if you have a card with a $1,000 limit and you're at 80% utilization, that's hurting your score way more than a $5,000 card at 50% utilization, even if the APR is lower. The best move is usually to pay down the card that's closest to its limit first, because that's what the credit bureaus see. Then once you get that one under control, hit the high APR card next so you stop bleeding money on interest. Just a little tweak to your plan, but it can save you some headaches.

cole_flores4410d ago

My buddy Mike tried the snowball method for like a year and got nowhere. He had a store card with a $300 balance but a 28% APR that was killing him, plus a bigger card at 15%. After he switched to paying the high APR one first, he said his score jumped 40 points in like three months. It's wild how much the interest rate matters even when the balance is small.

davidkim10d ago

Iris actually made a solid point about utilization versus APR, but theres something else people miss. The type of card matters too. Store cards and gas cards are seen as higher risk by lenders, so even a small balance can drag your score down more than the same amount on a regular Visa or Mastercard. Mike's $300 store card at 28% probably hurt his score way more than the dollar amount suggests just because of the card type. Thats why mixing the focus on APR with the card type can make a bigger difference than either strategy alone.