The Snowball Debt Solution
Is there such a thing as a simple debt solution anyone can follow? The answer to this question will depend on quite a number of factors. Among them would be the obvious notion that different people will have react differently to different approaches to getting out of debt. This is why there is more than one method of debt solution available. Of all the methods of getting out of debt, one of the most popular would be the snowball solution. The reason it is popular is that it works. As such, this is a method well worth taking a closer look at.
The way the snowball method of debt solution works is very basic. You would target one credit card for complete payoff. Once it is paid off, you would then take the amount per month you were paying towards that card and combine it into what you would be paying on the next card.
Here is how this debt solution works: You have three cards with a minimum monthly payment of £150. With one card you will pay £225 until it is paid off. The remaining two cards would be paid at the minimum monthly payment amount. Once the first card is at a zero balance, you would combine the payments of the first and second card. That would be £375 per month. As soon as that is paid off, you would address the third card by paying £525.
Of course, you have the option of lessoning your payments as the credit card balances of the second and third card drop. However, doing so will delay your ability to pay all your debt off. That might not be the best debt solution.
You will likely have both high interest and low interest rate credit cards. With this debt solution method, which card should you seek to pay off first? Honestly, there is no definitive answer. Some prefer paying the higher interest card and others prefer paying the lower interest card. Paying off on the lower interest card will lead to a quicker zero balance which is why most would prefer “attacking” it first.
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