Let’s face it debt is a part of our modern day lives.  In most cases you are able to handle it paying your credit cards and then reusing them again.  However in the age of the Pandemic small and medium size debts can become overwhelming especially if you experience a temporary layoff.

So what is the best strategy to pay off small and medium size credit card debts?

Without contest the best strategy is the “Debt-Snowball” method.  This process gained notoriety by personal financial commentator Dave Ramsey.

So how does it work?  The strategy focuses on paying off debt in order of smallest to largest disregarding what the interest rate that is owed on the credit cards.

For example lets say you have a MasterCard with a $600 balance, a Old Navy Card with a $330 balance, a Visa with a $175.00 balance and a Lowes card with a $1,000 balance.  You would just pay the minimum payment on the other cards until the Visa’s paid in full.

Then once you pay off your smallest bill in this case the Visa, you will then move on to the card with the next biggest balance.  From our example this is the Old Navy Card. The idea is just as a snowball rolled down a hill gains momentum, so to your debt obligations as you pay them off.

So what makes the Snowball method the best strategy to pay of small and medium size credit card debts?

1. It provides motivation

When you are feeling overwhelmed with debt any slight improvement provides motivation. With all the negative press these days we can all use a boost.  Paying off a bill — even a tiny one will provide that incentive to keep going.  The debt snowball approach very base provides that as you tackle the smallest bill.

Motivation is the secret ingredient.  When you pay off that smallest debt first you get a taste of victory.  That feeling of success will drive you tackle the next smallest debt.  Nothing works without motivation and the debt snowball method provides it in spades.

2. It provides psychological boost. 

There is a universal truth that winning boosts morale.  When you payoff the smallest bill it does wonders for the psyche.  With one you know you can pay off 2 and then 3.  The tiniest win psychologically compels you to keep pushing on to the ultimate goal of debt reduction.

3. It delivers quicker results.

Paying off a small debt is easier and will take less time than if you target a bigger debt. It is also works faster than attempting to pay a credit card debt with the highest interest first.

4. It causes behavior change.

Paying off any debt, even a small one, will get you out of the rut of impossibility.  When you feel you are in a heap of debt, negative thoughts of “why try” seep in.  You may feel there is no way forward.  But when you start, tackle, and pay off that first debt hope is restored. Hope combined with results causes behavior change.  You feel the rewards of debt reduction.  Debt reduction is motivating.   The more you feel motivated the more compelled you will be to pay off the money you owe.

But there is one more caveat. Once you become debt free, you are less likely to compile on new debts.  You know how painful that road is and you will do your best to avoid it.

For  these 4 reasons alone the snowball method is the best strategy to pay off small and medium size credit card debts.