HOW TO PAY OFF CREDIT CARD DEBT | Snowball VS Avalanche Method


debts snowball and debt avalanche are two of the most famous go-to methods for getting out of debt both require you to focus on one debt while making the minimum payments on all the rest however the debt you focus on is different for each method let's find out which method of debt reduction suits you better [Music] using the debt avalanche method you make the minimum payment for all your debts but focus on the one with the highest interest rate you save you big guns for that one any and every extra dollar goes towards paying off that high interest debt once the big one crumbles and crashes you move on to the next biggest and so on until you're debt-free money was this is the smartest solution since you're getting rid of the debt with the highest interest rate first with the debt snowball method you completely disregard interest rates the only thing that matters is being able to take your debts off quickly which is why you attack the smallest debt first for making your minimum payments on all the others once you're done with the smallest debt you can add the money that went towards your snowball and move on to the next one your snowball grows with every debt you pay off sounds sensible right well it is but it will almost certainly cost you more than the avalanche method especially if you have debts with high interest rates so why do some people prefer it over debt avalanche because each small victory gives you a morale boost that's your fuel to keep going the debt snowball method gives you visible results quickly for many people that feel-good factor makes it worth paying a little bit extra in the long run debt avalanche is undoubtedly the more sensible approach but sticking to it requires more determination there are no external motivators so you need to keep pushing yourself to make your payments so have you ever used any of these methods or did you approach your debt in an entirely different way let us know in the comments [Music]




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