4 Ways to Pay Off Debt (That Aren’t Snowball or Avalanche) 

Resource provided by SavvyMoney

Author: Jean Chatzky with reporting by Casandra Andrews

Consider these methods for paying down your high-interest debt.

Do one thing: Set aside an hour and look at your last two months of financial statements. Review credit card expenses and checking account expenditures to see where your money is going.

Debt Weighing Heavy on Americans

High-interest debt is crushing millions of Americans every month. And if it feels like the problem is getting worse, it is. While U.S. household debt is at historic highs, the ability for consumers to pay it off is lagging.

Remember, making minimum payments isn’t recommended if you can help it because it will keep you in debt much longer. Paying credit card balances off completely by the end of your grace period is even better.

Strategies for Tackling Debt

Back in 2004, I published “Pay it Down: From Debt to Wealth on $10 a Day.” Even though things cost more now, the idea is the same.

• Small Consistent Changes. By making small permanent changes in your daily routines—like skipping a fast food meal or canceling a subscription—you can save money on non-necessities to get out of debt and build a better life.

And when I say debt, I mean high-interest credit card debt. Other lower-interest debts, such as a mortgage or student loans, aren’t in the same category. If you’re ready to feel better and sleep more soundly, consider these methods for paying off debt.

Micropayments

Micropayments build momentum by letting you chip away at credit card debt throughout the month. Instead of one monthly payment, send several smaller payments during your billing cycle.

• Automatic Micropayments. Set up automatic transfers from your checking account every two weeks. You’ll pay 26 times per year instead of 12, helping you pay less interest and pay off debt faster.

Balance Transfers

If you receive credit card offers with low or zero introductory rates, consider moving your high-interest debt to a lower-rate card. Read the fine print and pay on time—one late payment can cancel the intro offer.

The Blizzard Method

The blizzard method is a hybrid of the snowball and avalanche payoff strategies.

Here’s how it works:

1. Start with the snowball method by paying off your smallest credit card balance first. This gives you a quick psychological boost.
2. Once a few cards are paid off, switch to the avalanche method and pay off the highest-interest card next while continuing minimum payments on others.
3. Repeat until all credit card debt is paid off.

Do the Hustle (A Side Hustle)

Sometimes you can’t squeeze any more savings from your budget. If you’re already doing the following:

• Rarely eat out
• Carpool
• Drive an older car
• Know where every penny is going

It may be time to consider taking on extra work to pay down your debt.

• Monetize Your Hobbies. Look at your interests to see what could be fun and profitable—like pet sitting or dog walking. Whatever you choose, funnel your extra earnings into paying off credit card debt. You won’t regret it!