Debt Snowball is a common term for a specific method of reducing your debt. A lot of people are suggesting that the way to do the Debt Snowball is to list your debts in descending order with the smallest payoff or balance first. Furthermore, and this is according to them, you should not be concerned with interest rates or terms. But based on my experience, I have noticed that by doing so, you are not pushing the snowball down, but you are actually rolling the snowball uphill.
The above mentioned strategy was said to have been devised to give you a quicker feedback and will allow you to be more likely to stick to the plan. But the truth is, it will only end up with you paying extra money to your creditors. Try to look at
your credit cards with balances. What most people do is they pay the most money possible per month first to their card with the lowest balance and make minimum payments to the card with the highest balance until the card with the lower balance is paid off. By then, they send the entire payment to the card with the highest balance until that debt-repayment is completed. They just got it all backwards. What Snowballing says is that you pay the most money possible per month to the highest-balance card and make minimum payments to the lowest-balance card until the highest-balance card is paid off. Then you can send the entire payment to the lowest-balance card until that debt-repayment is completed.
