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How to Pay Off Credit Card Debt & Pay Less Interest

Struggling to pay off credit card debt? Do you know the real cost of paying just the minimum on your cards? Want to know the fastest and most efficient way to pay off your credit cards?

Did you know: Paying just the minimum ($77.50) monthly payment on a credit card with a balance of $3000 at 19% would take 18.6 years to pay off?! How depressing is that!

Is there anything more demoralizing than credit card debt? Why does credit card debt seem to linger on forever? What makes it so hard to get rid of?

Could it be...

The exhorbitant interest rates?
The fact that it will take decades to pay it all off at your current rate?
Or is it because you know you only have yourself to blame?

Ready for the good news?

You can pay off credit card debt quickly and efficiently, without consolidating or refinancing your mortgage! So, if you want to pay less interest and increase your credit score while you pay down your debt then I have two words for you, "debt snowball".

What is the Debt Snowball?

The debt snowball is a very effective method of paying off debt. So-called because it employs the momentum of compounding payments in a roll down effect, alot like a snowball rolling down a hill. By targeting one debt at a time this method allows you to pay more on the principal of your debt, thereby minimizing the amount of interest you pay.

TIP: Sticking to the snowball method can also help build up your credit score as you will be making regular payments on all your cards - on time of course! Creditors like that!

How Does it Work?

The snowball works like this:

List all your debts in order, smallest first or highest interest first (I'll discuss which is better and why later). The first debt on your list is your "target debt".
Pay only the minimum payment on all the other debts on your list.
Pay as much as you can afford on the target debt until it's paid off.
Roll payment down to the new target debt
And so on down the list

TIP: In order for your debt snowball to be most effective your payment should be well in excess of the minimum payment for your target debt (ideally a few hundred dollars more).

Smallest first vs. Highest interest first

There are two schools of thought over which order debts should be paid in. Some people like Dave Ramsey, believe it's better to go for the quick victory and psychological boost of paying your smallest debts first. While one could easily see the logic in that, I would argue that paying your highest interest debts first makes more sense. Why? Because by paying the highest interest debts first means you pay even less interest over time than you would by paying the smallest debts first.

Pay Off Credit Card Debt Even Faster!

Now that you're snowballing your debt you can shave more time as well as interest off your debt payment plan. Combine the debt snowball method with these tips to really get your snowball rolling and pay off credit card debt even faster.