The debt snowball method is a debt payoff method that focuses on eliminating your smallest balances first. You continue to pay the minimum amounts on your debts to avoid dinging your credit score or accruing late fees, but any leftover cash goes toward your smallest balance.
Should I use the debt snowball method if I have high-interest debts?
While the debt snowball can be a very effective debt relief tool, it may not be the best fit for high-interest debts. If your debts have high-interest rates, you may want to instead follow the debt avalanche method.
With a debt consolidation loan, you’ll take out a new loan to pay off your existing balances. Debt consolidation loans often have lower interest rates than credit cards, so you’ll be able to save cash as you pay off your debt.
With a debt management plan, you’ll work with a nonprofit credit agency to roll your existing debts into one monthly payment and reduce your interest rate. You’ll have a fixed payment plan that will help you pay off your debt in approximately 3-5 years.