+36 votes
by (540 points)
Newbie here!  Why would someone work on the smaller CC balances first instead of CC with the highest interest rate?Newbie here! Why would someone work on the smaller CC balances first instead of CC with the highest interest rate? Thanks!  
Newbie here!  Why would someone work on the smaller CC balances first instead of CC with the highest

32 Answers

+43 votes
by (4.8k points)
 
Best answer
Because if you have a credit card at 5, 000 with a payment of $150 a month and then a credit card at $500 with a payment of $75 a month and you begin chipping away at the higher one it’ll take longer for you to see progress than if you began putting everything extra toward your $500 card and getting that paid off within a few months. then you can take that $75 and instantly put it with your other $150 and everything extra. At that point you’ve got the good feelings from paying off the smaller one AND more money per month to help pay off the larger one. Ya know. to say it the longest way possible  hopefully that makes sense.  
+53 votes
by (1.5k points)
Depends on how you find satisfaction. For me it’s paying down the smallest loan so I can see progress.  
+43 votes
by (750 points)
It’s a personal satisfaction thing. If you’re someone who needs small wins to keep you motivated, it allows you those victories.  
+40 votes
by (9.2k points)
Small gains help you see progress and reinforce the behavior of paying the cards off. I personally am doing a mixed snowball, because I have a zero % on one of my accounts for the duration of the balance, so that one I am paying the minimum payment on each month.  
+39 votes
by (2.7k points)
With several debts a win under the belt offers motivation. You can also apply that payment to the next payment so on and so forth. If the highest interest is also the highest balance it may seem like a task to daunting to take on. I am on the high interest first bandwagon but see how the other way is more plausible for some.  
+30 votes
by (5.2k points)
We don’t. Some people do that as motivation. We payed off a few smaller ones then realized how much we lost in interest on the other debts. We do avalanche, highest interest first. Saving us hundreds in interest. To each their own.  
+40 votes
by (2.2k points)
The smaller stuff is paid off quicker, which helps keep your motivation.  
+34 votes
by (20.3k points)
I like to see the $0 balance more than some fictional savings that i don’t see right away. While i understand i could be savings $1000s, it’s not like my bank account will suddenly have a $1000 balance once my cards are paid off.  
+34 votes
by (3.2k points)
In order to "snowball. "
+40 votes
by (2.6k points)
Also you'll have fewer payments each month if you pay off a smaller amount. Then you can take that payment that you would've had to pay to use towards another card. It reduces the number of minimum payments you have to make on various accounts.  
+28 votes
by (3.6k points)
I prefer avalanche method (interest) over snowball method. It’s all about personal preference.  
+13 votes
by (1.2k points)
I did the debt payoff app that someone else shared on this page. I was SHOCKED to see that doing snowball actually took 1 month longer and tons more in interest. So I've changed my plan. I do have 1 cc that only has about $500 on it but everything else (including cars) is between $5-6k balance so roughly equal. Maybe that's why the snowball doesn't work for me? Idk. But I'm doing the avalanche AFTER next month when I pay the $500 cc.  
+50 votes
by (3.5k points)
It is personal preference. Select the method that will keep YOU motivate to continue to pay down your debt.  
+35 votes
by (4k points)
Use an app like vertex42 to compare the interest and payoff timelines between snowball and avalanche methods. My interest payment was very close (less than $800) between the two and my complete payoff ended at the same time either way, BUT if I use avalanche, it would be many months before I saw a single payoff where with snowball, I see progress continually.  
+27 votes
by (17.9k points)
Sometimes it’s a visual to see progress quickly. it’s motivating and then you can avalanche the higher rates.  
+27 votes
by (560 points)
I've went back and forth between these, my tie breaker is usually whichever has the highest monthly payment.  
+28 votes
by (13.1k points)
It’s all personal preference. Some people need to see the progress of paying one totally off and some are mad about the interest rate so they tackle those.  
+30 votes
by (3.8k points)
Dave Ramsey says it’s for the quick wins. It’s about getting and keeping motivated to continue on your journey. It’s one method! You do you Boo!  
+52 votes
by (1.1k points)
Personally for me the smaller ones happen to be the highest rate. But I am doing snowball because I need to see immediate results in order to stay motivated. I have a small one that I paid off in just a few months of focusing on it. It’s a small one but there is always a balance so it was nice to knock it out and forget about it. Then I leave that normal payment on my payment calendar and call it extra debt and I started to use that normal payment for the next card.  
+23 votes
by (3.9k points)
Instant gratification
+31 votes
by (10.6k points)
I work on really small ones first (under $1k) But we focus on whatever ones are earning interest forst
+49 votes
by (9.1k points)
Free up minimum payments quickly so more money available.  
+16 votes
by (7.2k points)
It just depends on the person.  
+26 votes
by (4.8k points)
Just personal reference.  
+2 votes
by (2.3k points)
Faster gratification? Seeing 0 balances faster.  
+21 votes
by (5.7k points)
For morale. It can be overwhelming when you start out, and for some time into it.  
+46 votes
by (9.8k points)
Builds momentum. Less to track. Frees up payments for a larger snowball.  
+26 votes
by (1.8k points)
Getting Rid of the smaller ones and snowballing up to the higher can be done with less impact on yoyr lifestyle.  
+38 votes
by (2.9k points)
We’re paying off smaller debt to largest. It doesn’t After the interest rate to me. I like being able to pay the smaller debts off first and feel like I’m getting some where. It’s just a personal preference for us
+40 votes
by (7.9k points)
Some people like to see debts being paid off quickly, it keeps the excitement and motivation up! But it is all a personal preference!  
+52 votes
by (1.7k points)
It's also to help a mindset change. See quick turnover of small debt and roll in to the next small one etc. So you can see quick n deliberate reduction in debt and it helps u stick to your guns. It's not about the maths or % , is all about changing your way of spending and not flashingthe cards when u fancy it.  
+39 votes
by (7.3k points)
It's a relief for us to pay off the low balances. One less thing to worry about. Plus, having open accounts with 0 balances helps your credit score.  
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