Re: HELP! I'm struggling to keep up with my credit...
Level 2

Debt management

The interest is how credit card companies and student loans(and personal loans) generate revenue for the credit lender. The higher the interest, the less the money goes towards the principle of the loan or the balance of the credit card. Paying towards ALL loans, while divvying up the payment amounts by interest, saves money over the long term. It shouldn’t be a single-minded focus on balance if you end up paying 10-15 percent more on the loan/balance than you would if you structure your debt repayment.

Understand how interest is calculated on your balance/loans is critical, as there are varying types of interest on loans. When I responded to the student loan question, I should have added this article from NerdWallet for reference:

https://www.nerdwallet.com/article/loans/student-loans/student-loan-interest-capitalization

Arithmetic and Finance are not synonymous; it’s more complex than simply “pay down the biggest number”.  

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