Pay Off Your Credit Card Bill Using The Snowball Method
If you have more than one credit card, it’s easy to become stressed out and make each one’s minimum payment. And, when you pay just the minimum amount due, you can be sure that you’ll pay a significant amount of money in interest. This can cause you to be unable to fulfill your payment obligation for quite some time.
1 – Make a list of every card you have include their minimum payments, current balance and interest rate.
2 – Figure out how much money you have extra to pay every month to the balances, while still making the minimums on all of them.
3 – Begin with the lowest balance credit card, add the additional moneys to the minimum payment every month, until you have paid it off fully.
4 – Once you’ve got the first card gone, it’s time to pay on the next highest balance card and repeat the step three. Add the payment of the first credit card payment to the second card every month until it’s completely paid off.
Be sure you do this for everybody card until you’ve paid them all off!
2 Other Ways To Make Use Of The Snowball Method
When you focus on the card with the lowest balance, you see quicker results. This is a huge motivator for many folks. Of course, there’s a downside to doing things this way.
If you begin with the lower balance first, you’ll pay additional interest before all the cards are paid off. Since interest compounds, it adds up quicker on the higher balance cards. Plus, the lowest balance card may not have a high interest rate so you could pay more interest in the end.
If your greatest concern is the interest amount you pay, begin with either the high interest rate credit card or the highest balance credit card and do the same steps until you finally have them paid off.
Yes, this method will take longer to get all the cards paid off. However, with willpower to make those extra payments, you will succeed. If you have a problem with willpower, it would be best to pay additional interest to pick the more encouraging method.
Read the next article about the pros & cons of paying bills with a credit card.
|Copyright © 2008 Debtopedia.com|