There are two methods of thought when it comes to paying off credit card debt. The “Snowball” method and the “Avalanche” method.
The snowball method is when you pay off the credit card with the lowest balance first regardless of the interest rate which would give the debtor quick satisfaction. Once that credit card is paid you would roll that payment into the next smallest balance.
The avalanche method is when you pay off the credit card with the highest interest rate first. Once that credit card is paid you would roll that payment into the next highest interest balance.
I have decided to create a third method which I would like to call the “Blizzard” method which incorporates a little of both of the other methods. I feel like nowadays we get some pretty decent forecasted warnings of impending blizzards so we can prepare for them. This is the same type of method I have taken with our credit card debt. I was bothered most by the highest balance credit card, it was keeping me up at night. Instead of paying off the lowest balance card which was $2600 I wanted to plow as much money into the highest balance card which at the time was $15,500. After doing a balance transfer and combining 2 cards, I had a year with zero percent interest. After the zero percent offer was done, I had paid about $6000 off on it bringing it down to about $9500. I went a couple of months with the interest rate at 23.99% and was drowning again so I called the credit card company, and they lowered the rate to 7.99% for 6 months! (It can really pay to ask for a reduction in interest rate) Now after a few shorts months I have that credit card balance down to $4200! So, if you can prepare yourself with getting the interest rate lowered and do a balance transfer to get yourself ready for the “Blizzard” you can then plow as much money into the highest balance card. (I love these snow references lol)
Now that the highest balance card is down to $4200 that means I have paid off $7454 of debt so far this year bringing me just $2500 left to reach my goal of paying off $10,000.
I still have three credit cards, but one card is $4200, one is $2600 and one is about $5800. And guess what? Because of my “Blizzard” method my credit score has soared to 805! Pretty amazing right?
I’ll update again next week.
-MM
The Professional Domestic 