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How to Snowball Your Credit Card Debt |
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by: Debbie Dragon
If you are buried under credit card debt and are ready to tackle it full force, using the snowball method just may work for you. The snowball method has become an increasingly popular means for paying down credit card debt because it works. If you are disciplined and serious about getting out from under your credit card debt quickly, this is a very doable option.
There are two different methods for snow balling your credit card debt and financial experts all have their own opinion on which way is best. In actuality both methods pretty much work the same way and the right way is just a matter of opinion.
The first method is to pay off your credit card with the smallest balance first. The idea behind this is that the quicker you pay off your first credit card debt the more likely you are to stay motivated and to tackle the next credit card.
The second method is to look at the credit card that has the highest interest rate and no matter if it is your lowest or highest balance, start with that debt first. This method in the long run could end up saving you some additional money in interest charges.
No matter which method you choose to go with, the first step in snowballing your credit card debt is to get out a piece of paper and write down each credit card that you owe money on, the total balance due, the minimum payment and the current interest rate.
The next step is to list the credit cards in the order that you have decided to pay them off, choosing to go highest interest first and on down or lowest balance to highest balance.
Now, the objective is to pay the minimum balance on all of your cards each month except for the one that you have on the top of your list to pay off first. For this card you should take every extra penny that you can pull from your budget and apply it to that credit card debt. Continue to do this every month until you have the first card paid off. Then move to the next credit card until it is paid off and continue to move down the list until all of your credit card balances are at zero.
Some people will argue that they don’t have any extra money to put towards paying off their credit card dept. Realistically however, most of us can find plenty of extra money with just a little bit of commitment and dedication. If you already have a monthly budget, this is a great first step and you can just make some tweaks to it to find the extra money. If you don’t have a monthly budget, it is time to create one.
Your monthly budget should include all of your essentials like your mortgage or rent payment, utility bills, gas, food and so on. All non-essential items need to be removed from your budget during the pay down your debt using the snowball method time period. This means eating out, splurging at the grocery store, gym memberships, etc. When you cut out the non-essentials, some people are amazed at how much extra money they actually do have.
Although the snowball method to get out of credit card debt can seem harsh, it gets results and quick ones. Many people who thought they could never get to the bottom of their credit card debt and decide to try out the snowball method are surprised to see their debt dwindle and disappear, sometimes in just a few months. The more serious and disciplined you are, the sooner you will be credit card debt free.
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Credit Card Articles > Credit Card Debt > How to Snowball Your Credit Card Debt
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