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Is Snowballing the Right Debt Elimination Strategy ?

What is snowballing? It is a debt elimination stategy that involves paying off your lowest balance debt first, then your next lowest balance debt second, and so on. It ignores the interest rates on your various debts, and instead focuses just on eliminating the balance of each debt, one by one.

Let's get one thing straight: this debt elimination strategy is a psychological trick. With this strategy, you will end up paying more than if you focused on the high interest rate debts first. The stategy works because some people need to get over the psychological obstacle of having various debts, with various principles, and various interest rates. By snowballing these debts, they will eliminate the individual debts more quickly, but it will leave them with the bigger ones in the end, and these might have a higher interest rates than the earlier ones that they paid off.

So what do I think about this strategy? I think it's total hogwash. It's for weak-minded people who are unable to look at the numbers rationally, and just try to make them go away. The best strategy is almost always going to be to seek debt consolidation experts first, who will be able to lump the numbers all together into one debt with one interest rate. After doing this, you should always try to pay more than the minimum payment. That's the best way to pay off the balance, not just the interest.