# Tackling Four Major Debt Types
Climbing out of debt requires specific strategies for different types of borrowing. The four most common debt categories each demand different payoff approaches.
**Credit card debt** carries the highest interest rates, often 15 to 25 percent annually. This debt should be your priority. List all cards by interest rate, then attack the highest-rate card first while making minimum payments on others. Alternatively, some people target the smallest balance first for a quick psychological win. Either way, stop charging new purchases immediately. A balance transfer card offering 0 percent introductory rates for 12 to 21 months can buy time if you commit to paying principal aggressively during the promotional window.
**Student loans** typically range from 4 to 8 percent in interest. Federal loans offer income-driven repayment plans that can stretch payments to 20 or 25 years, lowering monthly obligations. Private student loans rarely offer such flexibility. If you have both, prioritize private loans first since they have fewer consumer protections and borrower benefits. Federal loans can wait while you tackle higher-rate debt.
**Auto loans** usually sit between 3 and 9 percent depending on credit score and lender. These carry collateral risk. miss payments, and the lender repossesses your vehicle. If your car loan rate exceeds 6 percent, refinancing through a credit union or online lender might reduce your rate by 1 to 3 percentage points, cutting years off the loan.
**Mortgage debt** typically carries the lowest rates, around 6 to 8 percent currently. This should be your last priority after eliminating credit cards and higher-rate loans. Paying off a mortgage early rarely makes financial sense if rates are reasonable. Your money works harder paying down 20 percent credit card debt than prep