There are a multitude of “clever” tips and tricks to get out of debt fast, but the reality is that getting out of credit card debt is much more like a marathon than a sprint. Whatever method you choose to deal with your debt, you will be managing the situation for some time.
One of the more popular methods for paying off debt is the “debt snowball.” According to Forbes Magazine, with the debt snowball method the debtor tries to pay off the credit card with the lowest balance first.
How does this method work?
Assuming that you have multiple credit cards, you will arrange them by balance. The thrust of the debt snowball method is to pay the minimum on all of your credit cards each month. Any extra income you have goes toward paying off the credit card with the lowest balance.
The idea behind the debt snowball method is to build momentum. Once you have the smallest debt checked off, you should feel a great deal of motivation to continue since your success is palpable. The secret to the snowball method’s success is keeping you motivated to move forward. You continue to tackle the debts one by one, larger and larger, until you finish.
What are the negatives?
The major negative of this method is that it does not take into account interests. So, your smallest debt may not necessarily have the highest amount of interest. With the debt snowball method, you may end up paying more interest overall on your debt as compared to prioritizing interest levels first.