Using the snowball method to pay off credit card debt The snowball method targets the credit card that has the smallest current balance. While you assign the minimum payment to all other credit cards, you useeverybit of your available budgeteverymonth topay off the credit card that has the s...
Similarly, if you've consolidated debt with a personal loan or by borrowing from family or friends, prioritize paying off high-interest balances first. Paying off the smallest balance first Then, there's thesnowball methodof debt repayment, which involves paying off the card with the smallest ba...
Similar to the snowball approach, the debt avalanche approach starts with listing your debts. But instead of paying off your credit card with the lowest balance first, you pay off the card with the highest interest rate. It can be a faster, and cheaper, method than the snowball method. Aut...
The better financial move, however, is the avalanche method, according to McKeon. Because this strategy focuses on attacking the credit card debt that’s racking up the most interest, you’ll pay less in financing costs than with the snowball method. Once you’ve cleared your most expensive ...
Of course, proponents of thedebt snowball methodargue that paying off the lowest balance is actually more helpful than focusing on the highest APR. But it all comes down to what motivates you. If saving on interest encourages you to keep going, then McClary's rule of thumb will probably wo...
Pay off the smallest debts first.If you would rather build momentum, thedebt snowball methodmight make more sense. With this strategy, you make the minimum payments on all your debts but then focus on putting any available money toward paying off your smallest balance first. Once you’ve pai...
2. Pay off the smallest balance first Best for those who like to see quick results With the debt snowball method, you’ll make the minimum monthly payment on all your credit cards, except for the one with the smallest balance. On that card, you’ll want to make the largest possible pay...
The debt snowball method focuses on paying off your debts in order of smallest balance to largest. You make minimum payments on every debt except the smallest, where you pay as much extra as possible until it's paid off. The idea is that getting "wins" by paying off smaller debts quickly...
In this article, we will demonstrate how to create acredit card payoff calculatorin Excel using the snowball method. Debt Snowball Method When a borrower has more than one debt and repays them by paying off the smallest debts first, we call this technique the“snowball”method. As an example...
If you do decide to take this route, check out our guide on thebest 0% APR credit cards. Pick A Debt Payoff Method There are two main methods used to pay off debt — the snowball method and the avalanche method. With both methods, you’ll start by making minimum monthly payments onal...