Need to cut down on debt? We look at the debt snowball method

Need to cut down on debt? We look at the debt snowball method

RICHMOND, Va. (WWBT) - Millions of Americans are relying on credit cards to get them through this up and down year of 2020.

While credit cards are helpful, you eventually want a solid plan for paying them off. This is why, all this week, we are going over strategies for getting out of debt.

Today it’s the debt snowball.

Rank your loans from smallest balance to largest balance.

Put any extra money you can on the loan with the smallest balance. Pay the minimum balance on all your other loans.

Cherry Dale a financial coach with the Virginia Credit Union says when the smallest debt is paid off, take everything you were putting toward the account, say it’s $125, and add pay it to the card with the next lowest balance. “You take the $125 and apply it to the next card. So, you’re just snowballing down your debt over time,” Dale said.

It’s very important to pay the minimum on all your credit card balances so you don’t hurt your credit score.

You repeat this snowball process until you’ve paid all debts.

On Wednesday our Savings Guide will explain the avalanche method of tackling your debt.

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