Today I’m switching things up, I’m going to be answering one of my readers questions. Which credit card should I pay off first? High interest low balance, or Low balance high interest?
This is such a great question.
There are actually two methods in which you can pay off your debts. The first one is the snowball method. This is actually the method I chose to use for paying off my debts.
The snowball method is when you’re paying off those debts that have the smallest balance, without focusing too much on whether which one has the highest or lowest interest rate. It’s basically just knocking out the small debts, the smallest balances so you can get rid of them quick. And once they’ve all been paid off, you can finally move on to the next balance. So with the snowball method, you’re going from low to high in paying off your debt.
The second method you can use to pay off your debt is called the avalanche method. In the avalanche method, you will be focusing on your debts which have the highest interest rates.
Because it’s helping them get rid of the debts that have the highest interest, some people prefer the avalanche method because it saves them a lot of money in the long run. However, some people feel more comfortable using the snowball method.
It’s totally okay to go for whichever method you think works best for you. Whether you want to go for the snowball method or the avalanche method, feel free to choose and go with the method you’ll feel great using. After all, we’re all after the same goal and that is to get rid of all our debts and find our way to financial freedom. The choice is yours!
You can book you free 10 min money consultation call here where we will create a custom money plan for you so that you can get on track with your money and finally have a system that works. No more guessing what to do when you get paid. Book your session.
Pay off your debt fast grab your guide!
Subscribe to get your free debt guide and lots of other resources to help you reach your money goals this year