Avi_Patchava
Debt snowball Vs. Debt avalanche: What's better?
Managing debt can get overwhelming, especially with different minimum payments,
juggling cards with the high interest rates, and deadlines stretched across the
calendar.
Managing your own personal finance is never really a snap. And with credit card debt,
the math can get extra-hard too.
A systematic method can streamline debt repayments, save you money on interest
charges and late fees, and get you out of credit card debt faster.
Let's look at how each method works, see which one fits your style, and look briefly at
a third way - a data-smart Bright Plan with automatic payments. 4
The debt snowball method targets the lowest balances
● With the debt snowball method, you'll prioritize cards according to the size of
their balance - and quickly build momentum.
● You'll still make minimum payments on all your other cards - but you'll pay
more on the card with the lowest balance. It's your first card you'll target with
larger payments than the others.
● You'll quickly have fewer debts and balances to manage, you'll see progress
fast, and you'll feel real momentum.
● The debt snowball method forces you to focus your attention one debt at a
time. You'll also feel a real thrill every time a credit card is paid off.
The debt avalanche method targets high interest charges
● With the debt avalanche method, you'll prioritize credit cards with the highest interest charges.
● But it takes extra math. And it takes more than comparing APRs and interest rates.
● For the mathematically minded, the avalanche method has strong appeal: you're always targeting the highest interest debt.