Debt Relief Strategies- Snowballing Your Debt Payments

Dave Ramsey, a national radio host, is a promoter of the snowball method of paying off credit card debt. It's fairly effective for what it is worth, and can be the perfect solution for those people who need credit card debt relief. Here is a glimpse of what is involved and expected of you when it comes to snowballing your credit card payments.

First, you want to make a list of all of your debts. You start with the smallest balance and go to the largest. Ignore interest rates and other elements. Just look at the balances and order them from smallest to largest. Then, you commit to paying the minimum (at least) on each debt. In order to have the most effective results, you now need to add up your income and your expenses, and then determine how much extra money you have every month. Once the minimums have been paid with your leftover money, you should spend the rest on the smallest balance. That means if you pay all of your bills and have $600 left over, minus living expenses which have been taken care of, you will pay the minimum payment AND extra on the smallest balance.

Once that account is paid off, you then continue on and add the surplus money to the next smallest account balance that you have. Continue this process until all the debt that you have is paid off, and you will be debt free. The term ‘snowball' emphasizes the fact of how your ability to pay larger sums will increase over time like a snowball as you pay off more and more of your cards. It's more about human psychology because you are gaining momentum as you go rather than paying off large cards first and losing momentum as you go down.

There are some disadvantages to this process, including the fact that many people cannot do this because they simply cannot afford the excess money beyond the minimum payment. For people who are seeking debt relief, it is not an effective solution because they can barely make the minimum payments, if any, and cannot afford to make extra payments. You are also supposed to stop saving money and putting away for retirement during this process, which is a bad choice for many people. Ultimately, it's your choice to determine what works best. However, this method can be one option that people have for debt relief.

To learn more about debt relief and paying off credit cards and loans, call Epic Debt Relief today at 877-971-3232.