How to clear your credit cards

One of the most effective ways to clear debts is to use any money you have spare to pay down your most expensive debt first (while keeping up minimum repayments on the others). Once you've paid this off you'll have more cash available to knock your other less expensive debts on the head one by one.

Your most expensive debt will be the one that is costing you the most in interest, not necessarily the largest one in terms of size. It makes sense to tackle this one first as it's growing the fastest as more interest is being added.

However, it's first worth finding out if your credit card debt is indeed your most expensive form of debt; if it isn't, you may find that your efforts will be better spent on paying off this loan before you begin working on your credit cards.

That said, it is likely that your credit card debt is one of your most expensive because of the high interest rates that are generally applied to credit card borrowing.

Use the list you put together in Step 2a to remind yourself which card you are currently paying the most interest on - this should be the one you tackle first - and check that this is the most expensive debt you have outstanding.

Once you have identified the credit card that you're paying the highest rate of interest on, you can begin concentrating your efforts on clearing this first. Remember though to keep up minimum repayments on all your other debts too.