Which method is best for me? – Forbes Advisor


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You’re ready to tackle your debt with Step 1: Make a plan you can stick to. Having a plan in place is a smart money move.

Two of the most popular methods of debt repayment are the snowball and debt avalanche methods. With the debt snowball method, you make the minimum payment on each card, then put all the extra money you have on the card with the lowest balance.

Instead of determining interest rates on each card, you focus on paying off the card with the smallest outstanding balance. When this is paid, you will move on to the next card with the lowest balance.

The debt avalanche method involves using all available funds after making minimum payments on all your cards to first pay off the balance on the card with the highest interest rate and, when paid, switch to the card with the next highest interest rate. Repeat until you have paid off all your debts.

You can use our calculator to see how long it will take you to pay off what you owe using each method and see which one suits your goals.

Find the best balance transfer credit cards of 2022

Frequently Asked Questions

What’s the best way to pay for multiple cards?

The best debt repayment plan for you is one you can stick to. The debt avalanche method will generally cost you less over time since it tackles your highest debt first. But some find the debt snowball method gives them the psychological boost they need to stay on track.

How can I consolidate my credit card debt?

Credit card debt consolidation involves combining multiple credit card balances into one balance. This can make tracking easier as there is only one monthly payment due. The most effective use of a debt consolidation strategy is to transfer your debts to a credit card with an APR offer of 0% or an APR lower than what you are currently paying on your balances. This can help you pay off your debt faster and with less interest.

What happens if you go over your credit card limit?

When you make charges that exceed your available credit, certain things can happen depending on your particular card. Most of the time, your card will be declined for the purchase. But if you’ve agreed with the issuer to allow your card to exceed your maximum credit limit, you may be charged an overlimit fee of up to $25.

Running up against your credit limit will also negatively impact your score, as it means your credit usage will be high. Credit usage accounts for 30% of your FICO score and if you’ve used all of your available credit, it can significantly lower your overall score.

How much credit card debt is too high?

Defining “too much” debt is a personal choice that will vary for each individual. In general terms, too much debt can mean you’re maxed out to the point that bankruptcy could be your next move. But if you find that you can’t anticipate your debt and only make minimum payments on your credit cards each month, that could be considered too much debt. For some, paying interest charges is considered too burdensome. Ultimately, if you have debts that make you uncomfortable, it’s too much for you to carry without worry.

Can I pay a credit card with another credit card?

Banks do not allow you to pay your credit card balance with another credit card. But one escape from this rule is to take advantage of a 0% APR intro offer on a balance transfer credit card. A balance transfer offer, however, is not a perfect solution for paying off a credit card. In most cases, you will have to pay a balance transfer fee to transfer the debt to the new card, which can increase your debt load. You also can’t transfer debts within the same bank, so getting a balance transfer card from the bank you want to transfer debts from won’t work. Keep in mind that the 0% period will eventually end, so if you didn’t have a plan in place to pay off your debt during the promotional period, you could find yourself in the same situation as before.


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