Question

Michelle has four credit cards with the balances and interest rates listed below. She wants to pay off her credit

cards one at a time, based on the interest rate. In which order should Michelle pay off her credit cards?

>>>>>a. 3,2,1,4<<<<
b. 1,2,3,4
c. 2,4,3,1
d. 4,1,3,2

Answer 1

a) 3, 2, 1, 4

Explanation:

If you have multiple credit cards with different APRs, it is best to pay off the card with the highest APR first. This is because you will save the most money in interest by paying off the highest-rate debt first.

Therefore, as Michelle has four credit cards, each with different APRs, she should pay them off in order of the highest to lowest interest rate.

Since the highest APR is 23%, credit card #3 should be paid off first.

The next highest APR is 19%, so credit card #2 should be paid off second.

Credit card #1 should be paid off next as it has an APR of 17%.

Finally, credit card #4 should be paid off last, as it has the lowest APR of 15%.

So the order in which Michelle should pay off her credit cards is:

• 3, 2, 1, 4