Psychology experiments show why even the financially savvy have a hard time following sensible strategies
Despite its apparent burden on families across the country, many people do not effectively manage their debt. … The most effective way to pay off debt over the long-term is to focus on the loans with the highest interest rates first. Yet evidence has shown time and again that consumers are likely to manage multiple debts in ways that cost them more over time.
Instead, an overwhelming majority of participants elected to pay off the smaller debts first.
there are a number of strategies that both individuals and institutions can take to mitigate the burden of this debt, including consolidating and refinancing their existing debts.