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The Burden of Plastic Money: How To Pay off Debt


Are you struggling to pay off your debt? You’re not alone. According to a report by ValuePenguin, an American family on average owes $6,270, and the total credit card debt is estimated at $807 billion.

Debt is a heavy burden to carry. It can feel like you’re stuck in a never-ending cycle of owing money to others. But don’t worry; there are ways to pay off your debt and become debt-free. In this post, we’ll compare the snowball vs. avalanche methodologies for debt repayment.

Snowball vs. Avalanche Methodologies

There are two ways you can approach paying off your debt: the snowball method and the avalanche method. They each have their advantages and disadvantages, so let’s take a closer look at how they work.

The Snowball Method

The snowball method is the most popular way to repay debt and the simplest to understand. You start by paying off your smallest debt first, then work your way up to bigger ones.

The advantage is that it gives you quick wins since you reduce the number of financial obligations on your list. As you pay off each debt, you’ll feel a sense of accomplishment and be motivated to keep going.

The Avalanche Method

The avalanche method has a different approach, as it looks to reduce the overall amount of debt you have to pay by paying off debts according to their interest rate.

As such, you would first start by paying off the debt with the highest interest rate, no matter the balance owed, then work your way down to the debt with the lowest interest rate. By taking the avalanche method approach, you save money in the long run and pay less interest overall.

Can’t Decide Which Method To Use?

Now that you know the difference between the snowball and avalanche method, it’s time to plan your debt repayments.

If you’re struggling to decide which method to use or want to see how much interest you’ll save with each, you can find tools online that will help you quickly calculate your expenses.

For example, the Debt Payoff Calculator at allows you to input your debts, interest rates, and monthly payments. From there, you can see how long it will take to pay off your debt and how much interest you’ll have to pay in the process.

What To Do If You Fall Off Track While Using Either Method

Don’t despair if you fail to reach your repayment goals using the snowball or avalanche method. There are a few simple things you can do to get back on track.

First, look at your budget and see where you can cut back in other areas to increase your debt payments. You may also consider getting a part-time job or finding different ways to bring in extra money.

Additionally, make sure you’re still doing everything you can to reduce your expenses, such as eating out less or cutting back on unnecessary purchases. Finally, find ways to stay motivated with the repayments – this will probably be easier if you set smaller goals that you can achieve one by one.

Should You Focus on Paying Off Debts or Investing?

The answer to this question depends on your situation. If you’re struggling to make ends meet or are only just able to make the minimum payments on your debts, then it makes sense to focus on debt repayment. However, if you’re in a good financial position and can make more than the minimum payments, you may want to consider some investments, too.

Investing can be a great way to grow your wealth, but it’s important to remember the risks involved. Before investing, make sure you understand how the market works and the potential risks associated with investing. Additionally, if you’re looking to invest in growing your wealth, it’s essential to have a plan in place so you don’t take on more debt than you can handle paying off.

Credit Score and Debts

It’s no secret that paying off your debts can be great for your credit score. It shows creditors that you’re financially responsible and capable of repaying what you owe. Additionally, it can help reduce your credit utilization ratio, the amount of debt you have compared to your credit limit. All of this can significantly improve your credit score.

Paying off debts can help you free up cash to make other financial plans, such as saving for retirement or building an emergency fund.

While paying off your debts can positively impact your credit score, keep in mind that other factors influence it too. So, if you’re working on paying off your debts and see your credit score start to improve, don’t be discouraged if it doesn’t increase as much as you’d like. Just keep up the good work and continue following your debt repayment plan.

Closing Thoughts

Paying off debt can be a long and challenging process, but help is available if you need it. No matter which debt repayment method you choose, you can achieve your goal with a little bit of discipline, commitment, and smart budgeting.

Source: Plato Data Intelligence:


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