It seems that there are several schools of thought when it comes to getting out of debt. In this three part series, I am going to take a little bit more in depth look at some of the pros and cons of three different methods and leave it to you to decide which method you are going to use. For this first part in the series, I am going to focus on the one that people say saves the most money: Pay off the debt with the highest interest rate first.

From the standpoint of long-term savings, you can’t really go wrong with this method. The idea here is to list all of your debts and their interest rates. Then line them up with the highest interest rate first and the lowest interest rate last. Then, take the money that you want to use to pay off your debt and focus on the debt at the top of the list. After that one is paid off, move to the next one on the list, and continue down the list always focusing on the debt that has the highest interest rate.

The idea here is that you will make the same amount of progress on your total debt elimination each month no matter which principle balance you pay off, but the principle with the highest interest rate is the one that is costing you the most money so you are saving in the long term because you are not paying the extra interest.

This is a very solid idea and probably has the most long-term benefits and expert recommendations, but can be somewhat discouraging if that account with the highest interest rate has the highest balance of any of your debts. You feel like you are putting every extra penny that you can in to paying off your debts and yet you have just as many accounts as before and thus it may not be the most self-satisfying method.