Pay Off Credit Card Debt With These Easy Steps

507
SHARE

Step 1: List your credit card debt from smallest to largest (don’t worry about interest rates). Pay minimum payments on everything but the little one.

Step 2: Demolish the smallest debt. Once that debt is gone, take that payment (and any extra money you might have set aside for fun) and apply it to the second-smallest debt while continuing to make minimum payments on the rest.

Step 3: Once that debt is gone, take its payment and apply it to the next-smallest debt. On and on it goes until it’s all paid off. The more you pay off, the more your freed-up money grows and gets thrown onto the next debt. Similar to a snowball rolling down a hill. your free cash begins to accumulate and can be put towards paying off the remaining debts.

Which Credit Card Should You Pay Off First?

Doesn’t it make mathematical sense to pay off the credit card with the highest interest rate first? After all, those are the ones multiplying your debt the fastest.

Maybe. But numbers aren’t the problem here. Behavior is. The point of the debt snowball method is behavior change.