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Author: jrr7 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 2201  
Subject: Re: snowball Date: 7/24/2006 12:23 PM
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A "snowball" is a strategy for paying off your debts.

Each month, you pay the minimums on all your debts, but designate one as your target to attack. After you've paid all your bills, send all remaining money to that one. And don't incur any new debt (unless it's on a CC with an interest free grace period that you are 100% sure you can pay off before interest starts accumulating).

Soon that first card will be paid off. Then you designate another debt as your target -- all the money you were sending to the first debt now goes to that one. So the amount you are paying goes up and up, and your debt goes down and down. Think of a snowball rolling down a hill: it gathers size and momentum, all the while going lower and lower.

There are variations on this:
* attack debt with highest interest rate first
* attack debt with highest monthly payment first
* attack debt with smallest balance first
* after you pay off a card, call them up & ask what their best balance transfer offer is, and if they can beat some of your current cards, transfer money to them (to try to reduce your average interest rate)
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